As US Secretary of State Condoleezza Rice prepares to visit Moscow on October 21, the rapid increase in Georgian-Russian tension is posing a serious diplomatic test for the United States. American policy makers must walk a fine line in trying to encourage a compromise between Moscow and Tbilisi, without assuming too great a diplomatic liability through over-involvement.

Georgia may have overplayed its hand by arresting Russian military intelligence officers on espionage charges in a very public fashion in late September, instead of just expelling them quietly -- the normal modus operandi in such cases. [For background see the Eurasia Insight archive]. In response to the arrests, Moscow recalled its ambassador from Tbilisi, imposed punitive measures designed to disrupt Georgian trade, and halted issuing visas to Georgian citizens. [For background see the Eurasia insight archive].

Bearing the brunt of Russian retaliatory measures is the 1-million-strong Georgian Diaspora in Russia. Ethnic Georgians, including children, who presumably were staying in Russia illegally, have been forcibly repatriated. Prominent Georgian intellectuals who are Russian citizens are being harassed by the tax police. Georgian businesses in Moscow are being singled out by law enforcement authorities. The handling of this crisis is further damaging Russia's international standing as a dependable member of the G-8.

Since President Mikheil Saakashvili rose to power in the Rose Revolution of 2003, Russia has watched Georgia become an arch-nemesis of the Kremlin's geopolitical interests. In recent years, Georgian leaders have pushed to terminate Russia's military presence on Georgian territory; aggressively pursued membership in the NATO alliance; opposed Russian membership in the World Trade Organization; and tried to weaken Russian influence in the separatist regions of Abkhazia and South Ossetia. In response, the Putin administration has embargoed Georgia's key exports into Russia: Borjomi mineral water and wine.

Russia has not concealed its desire to witness regime change in Tbilisi. [For additional information click here]. The level of existing tension means that the outbreak of armed conflict is a very real possibility. In September, South Ossetian separatists, who receive Russian military support, fired on Georgian helicopter carrying Georgian Minister of Defense Irakli Okruashvili. This provocation, if it had succeeded in downing the helicopter, could have led to a renewal of war in the small secessionist territory that is a part of Georgia.

Russia's regional and global strategic aims explain why Moscow is escalating its conflict with Georgia. First, this is not the first time that Russia has attempted to block NATO enlargement into former Soviet territory. In 1999, Russia fulminated against the Baltic States' NATO membership. But at that time, Russia was extricating itself from a 1998 economic crisis, while, concurrently, a political succession struggle was playing out in Moscow. In part because energy prices were much lower in 1999, Western European countries supported the Baltic states' NATO bid despite Russian protests. Today, with Europe dependent on Russia's Gazprom, EU leaders are taking Russia's foreign policy positions much more seriously.

Second, the Kremlin is now buoyed by $250 billion in petro-dollar reserves. These funds can buy a lot of hardware for the Trans-Caucasus Military District and pro-Russian separatists in Abkhazia and South Ossetia.

Third, Russia is wary about the Baku-Tbilisi-Ceyhan oil pipeline, which takes Azerbaijani oil to Mediterranean markets, crossing Georgia and bypassing Russia. Soon the Baku-Tbilisi-Erzurum natural gas pipeline will come online, bringing Azeri gas to Turkey and Europe, once again bypassing Russia. Gazprom fears that this gas pipeline may eventually allow Turkmenistani and Kazakhstani natural gas to circumvent its pipeline network on its way to Europe.

If Georgia comes under the Russian sway, neighboring Azerbaijan would feel the full weight of Russian influence. Foreign policy experts in Moscow believe that the Russian government is angry that Azerbaijan has not allocated enough oil patches to Russian companies, and has facilitated its oil exports via Turkey instead of Russia. With increased power in the region, Russia is likely to act on these concerns.

If a pro-Russian administration were to come to power in Georgia, the Kremlin would enjoy self-evident geopolitical benefits. Russia would regain its stranglehold on the development and export of Caspian Basin energy resources. It would also put to rest American ambitions in Central Asia, and could cut off strategically important Kazakhstan from the western energy markets.

At this stage, however, the only scenario under which Russia could get its wish is via the use of force – an inherently risky proposition with potentially unforeseen consequences and side-effects, not only for Moscow itself, but also for the United States and all countries in the region, including Iran.

The United States today is preoccupied with Iraq, Afghanistan, Iran, and North Korea. Russia is a key player in all of these. Its increased cooperation in these disputes, so far insufficient, would be welcome. The future of US-Russian relations and global security requires that Moscow behave responsibly and constructively. Quickly defusing the Georgian crisis through diplomacy would be a good place to start. Washington should encourage the European powers, the European Union, and Turkey to become more engaged in diffusing the Georgian-Russian confrontation. Finally, Washington should advise Georgia not to escalate its rhetoric on Russia unnecessarily, or needlessly antagonize its large neighbor. After all, a peaceful and prosperous Caucasus is in Russian, Georgian, and American interests.