World Bank experts arrived too early to estimate the toll of conflict-related damages on the Georgian economy. The Georgian-South Ossetian conflict is yet to subside.

Watershed decisions are made every day amid an ongoing military build-up, with dozens of countries making known their positions on the conflict, and a plethora of forthcoming high-level visits to Georgia.

Among the latest developments was the August 26 decision by Russia unilaterally to recognise the independence of breakaway regions Abkhazia and South Ossetia, a move swiftly endorsed by both houses of parliament and Russian president Dimitry Medvedev and firmly denounced by Europe and the United States as infringing on Georgia’s territorial integrity.

Nato Secretary General Jaap de Hoop Scheffer condemned the Russian move as a “direct violation of UN Security Council resolutions rubberstamped by Russia as well”. He said that Russia’s actions in the past few weeks had brought into question its commitment to respect peace and security in the Caucasus. The Organisation for Security and Co-operation in Europe took a similar stand.

At a news conference the same day, Georgian president Mikheil Saakashvili said: “Russia’s decision today confirms that its invasion of Georgia was part of a broader, premeditated plan to redraw the map of Europe. Russia today has violated all treaties and agreements that it has previously signed.”

Bulgaria aligned its stance with that of its European partners, saying that Russia’s decision “raised serious concern. Bulgaria again re-affirms its unconditional support for the independence, sovereignty and territorial integrity of Georgia in its internationally recognised borders.”

In a televised address, Medvedev said, “In violation of the UN Charter, its commitments under international agreements, and in defiance of common sense, the Georgian leadership began an armed conflict. [...] The decision is not easy, but it is the only way to save people’s lives. [...] You know what is happening in South Ossetia.”

Russia’s decision came amid an already highly charged international atmosphere, where the clash of stern and radically different statements evoked Cold War fears and demanded urgent action.

The day before, Medvedev warned that his country stood ready to cut its ties with Nato. However reluctantly, Russia would do so “if Nato refused to co-operate”, Medvedev was quoted by international media as saying, adding that he was concerned by the alliance’s growing presence in the conflict region.

Russian state news agency RIA Novosti quoted a Russian military intelligence source as saying that Nato had stationed eight warships in the Black Sea with “more than 100 Tomahawk cruise missiles and Harpoon anti-ship missiles aboard. [...] Nato is actually deploying a surface strike group in the Black Sea”.

The statement came 10 days after Poland and the US struck a long-delayed anti-missile shield deal that Russia deemed an immediate threat to national security.

In a sign of the international community’s fears that Russia would swiftly go from words to action, media reports predicted that Russia would block the transit of US non-military materials and equipment to Afghanistan, in transgression of an agreement signed in spring this year. Russia’s Nato envoy Dmitry Rogozin rejected these reports, adding that his country had no such plans.

This episode happened a few days after King Abdullah II of Jordan visited Russia for talks with the country’s president and prime minister and to tour a military base near Moscow. After subsequent shuttles to Turkmenistan and France, the king of one of US’ staunchest allies, was home in time to receive August 25 US secretary of state Condoleezza Rice.

The US high-level visits to the region continue. Vice-president Dick Cheney was scheduled to visit Georgia on September 2, as part of a tour also including Ukraine, Azerbaijan and Italy.

A chorus of voices in the international community, however, signalled that it was Europe that should act as the broker in the Georgia-South Ossetian conflict because US involvement in Iraq and Afghanistan left Washington no extra capacity.

Irked by Russia’s tardy approach to withdrawing from buffer zones in Georgia, in what was characterised as disrespect of the six-item cease-fire agreement, French president Nicolas Sarkozy convened on September 1 a special summit of the European Council to discuss ways to protect Georgia’s sovereignty, find swift solutions for Abkhazia and South Ossetia, and map out a joint position on Russia.

While precise actions on quelling tension in Georgia are yet to become clear, there is little doubt about the common stand that the EU will take on Russia. Russia’s unilateral recognition of the two breakaway regions served as the necessary coalescing agent to bridge differences within the EU’s 27 member states.

After top government officials from Germany, France and the UK voiced harsh criticism of Russia’s move, the European Commission followed suit, which is a sign that even countries dependent on and fearing direct confrontation with Russia have rejigged positions and a pan-European agreement has been reached.

The chill of Cold War has gone down the world’s spine. Yet the risk of an outbreak of a wider conflict seems remote. Europe is still largely dependent on Russia’s oil and gas resources, while Russia wants international exposure. What happened in Georgia was a clear message from Russia that it would protect its immediate borders by quelling Saakashvili’s enduring anti-Moscow talk, and was a response to Western countries that earlier this year endorsed Kosovo’s breakaway from Russia’s ally Serbia. Europe’s harsh response – an admonition it wanted no more map redrawing on European soil, with military intervention involved and without its approbation.

It is quite likely that shortly after the European Council summit, Europe and Russia will meet to negotiate a compromise agreement. The question is what shape these compromises will take, and what concessions they will include.