Richard Beeston, Foreign Editor
It would be a serious mistake for the international community to regard the dramatic escalation of violence in Georgia as just another flare-up in the Caucasus.
The names of the flashpoints may be unfamiliar, the territory remote and the dispute parochial, but the battle underway will have major repercussions well beyond this volatile region.
The outcome of this struggle will determine the course of Russia's future relations with its neighbours, will shape President Medvedev's presidency, could alter the relationship between the Kremlin and the West and decide the fate of future energy supplies from the Caspian basin.
Quite what triggered the Georgian offensive, on the day that the world was supposed to gather in peace for the start of the Beijing Olympics, is not yet clear.
But it is known that a major confrontation has been building up. Indeed, British intelligence earlier this year predicted that a war in the Caucasus was probable in the near future.
Part of the responsibility must lie with President Mikheil Saakashvili. The US-educated politician has rightly been praised for turning around his country's dire economy, for transforming his former Soviet-style army into a modern Western force and for standing up to the Kremlin's intimidation.
Georgia has for the best part of two decades been saddled with breakaway regions in Abhazia and South Ossetia, both supported by Russia as part of the Kremlin's strategy to weaken Tblisi's authority.
Nevertheless, seeking to reintegrate the separatist provinces by force is a risky, some would say reckless, move that threatens to trigger an all out war between Russia and Georgia.
On paper, the small Georgian military is no match for the might of the Russian armed forces. But Mr Saakashvili has calculated that his friends in the West, notably America and Britain, will protect him against an all out Russian attack.
Anyone who has visited Baghdad's Green Zone will be surprised to discover Georgian troops providing security. They are part of a force of some 2,000 soldiers serving in Iraq. Their presence has helped forge a strong alliance with the Bush Administration, which provides Georgia with military aid and diplomatic support.
The Georgian leader may have calculated that he needed to make his move now against the breakaway region while Mr Bush is still in office. It is unlikely that his successor would be as supportive as the current administration.
Russia must also shoulder responsibility for the current crisis. Under President Putin, the Kremlin stepped up its support for Georgia's breakaway regions offering its inhabitants Russian citizenship and arming separatist forces while pretending to be playing the role of honest broker.
The Kremlin also attempted to break Georgian resolve by deporting Georgian citizens from Russia, imposing an air and land blockade and banning the import of Georgian goods.
It had been hoped that the election earlier this year of President Medvedev might signal an easing of tensions between the two neighbours. It seems more likely that, thanks to Mr Putin's continued influence as Prime Minister and the sinister role played by hardliners in the military, Mr Medvedev may instead find himself embroiled in an all out war.
The West, in particular America, has also stoked the regional fire. At the Nato summit in Bucharest earlier this year it pressed for Georgia and Ukraine's membership of the alliance. The move was blocked by the Europeans, but Nato did give a commitment to offer the two countries membership at a later date. That move was seen in Moscow as a direct challenge to its dominance in what it calls the "near abroad", the former Soviet republics.
Since then, Russia has made it clear in word and deed that it will do anything to prevent Nato's expansion on its western and southern flanks.
America and Britain are particularly closely involved in providing military assistance to the Georgians in the form of arms and training. The support is aimed at encouraging the rise of Georgia as an independent, sovereign state. But the help is also partly a means of protecting the oil pipeline across Georgia that carries crude from the Caspian to the Black Sea, the only export route that bypasses Russia's stranglehold on energy exports from the region.
For all these reasons, the stakes in this mini war could not be higher.
If Georgia succeeds in reimposing its sovereignty over South Ossetia in the face of Russian opposition, it will be a huge setback to Russia's influence in the region. It could also embolden other former Soviet republics, like Ukraine, Azerbaijan and Kazakhstan, who are also seeking to break out of Moscow's grip.
A defeat for the Georgians could well signal the end of Mr Saakashvili and set back severely Georgia's efforts to establish itself as a modern Western-looking democracy.
Either way, the conflict risks further undermining already strained relations between Russia and the West and encouraging those on both sides who would like to see a return to Cold War suspicion and rivalry.
Analysis: energy pipeline that supplies West threatened by war Georgia conflict
Robin Pagnamenta
The conflict that has erupted in the Caucasus has set alarm bells ringing because of Georgia's pivotal role in the global energy market.
Georgia has no significant oil or gas reserves of its own but it is a key transit point for oil from the Caspian and central Asia destined for Europe and the US.
Crucially, it is the only practical route from this increasingly important producer region that avoids both Russia and Iran.
The 1,770km (1,100 miles) Baku-Tbilisi-Ceyhan pipeline, which entered service only last year, pumps up to 1 million barrels of oil per day from Baku in Azerbaijan to Yumurtalik, Turkey, where it is loaded on to supertankers for delivery to Europe and the US. Around 249km of the route passes through Georgia, with parts running only 55km from South Ossetia.
The security of the BTC pipeline, depicted in the James Bond film The World is Not Enough, has been a primary concern since before its construction.
The first major attack on the pipeline took place only last week - not in Georgia but in Turkey where part of it was destroyed by PKK separatist rebels.
Output from the pipeline, which is 30 per cent owned by BP and carries more than 1 per cent of the world's supply, is likely to be on hold for several weeks while the fire is extinguished and the damage repaired.
But the threat of another attack by separatists in Georgia itself is very real.
Only a few days before the Turkish explosion, Georgian separatists threatened to sabotage the pipeline if hostilities continued.
The latest eruption of violence could easily spur fresh attacks. The BTC pipeline, which is buried throughout most of its length to make sabotage more difficult, was a politically highly charged project. It was firmly opposed by Russia, which views the Caucasus as its own sphere of influence and wants central Asian oil to be exported via its own territory.
Russia also backs the South Ossetian and Abkhazian separatists in Georgia and relations between Moscow and Tbilisi have curdled into outright hostility in recent months.
The BTC pipeline, which cost $3 billion to build, is a key plank of US foreign policy because it reduces Western reliance on oil from both the Middle East and Russia.
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