A small war in the Caucacus would not normally be a cause of growing international concern. The region is only too familiar with conflict and the West would at this stage be more involved in discussing humanitarian aid to the innocent victims of old tribal feuds. But the fact that George W Bush’s picture is widely displayed across Georgia while the face of Vladimir Putin is on equal show in the breakaway enclave of South Ossetia suggests this conflict is not just another minor ethnic squabble and that it may not stay local for too long.

The danger in any war on the border of a great power is that others begin to meddle and before anyone can find Tskhinvali, the capital, on the map we have a full-blown crisis. History is full of seemingly minor events - Kosovo and the Falklands to name two recent examples - leading to international showdowns. It is no secret that the recently resurgent Russia has long resented Georgia’s breakaway from the Soviet Union and its blandishments to the West. Its latest bid to join Nato and the European Union is seen in Moscow as a calculated provocation. Mikhail Saakashvili, the Georgian president, is so pro-American that he won a State Department scholarship to study at the universities of Columbia and George Washington before returning to enter Georgian politics, initially under the patronage of Eduard Shevardnadze, the former Soviet foreign minister.

As would be expected in such a tumultuous region, Saakashvili has faced challenges from ultra-nationalists, regional warlords and separatists, all exploited by Russia. Although he has cracked down, suspending civil liberties, his policies have won praise in the West for being pro free market and he has been a stout ally to the United States, sending troops to Iraq, Kosovo and Afghanistan. Indeed, 2,000 Georgian soldiers were ordered home from Iraq yesterday because of the crisis.

All this is taking place against the backdrop of Russia’s resentment at what it regards as growing western encirclement. Russia believed that after the collapse of the Soviet Union in 1991 it had an understanding that Nato would not expand into its back yard. Instead, former Warsaw Pact countries rushed to join the western military alliance and were accepted; Georgia and Ukraine are the latest to seek entry. When that is tied in with the United States wanting to site its missile defence shield against Iran in Poland and the Czech Republic, it makes the Russians feel particularly paranoid. In retaliation, Russia is talking of putting missiles aimed at Europe on its western boundaries and sending military officers to visit Cuba in a bizarre throwback to the missile crisis of 1962.

At such times it is essential for everyone to take a deep breath and hold back. Much is at stake. Not only could this war - that is what both sides are now calling it - further destabilise the Caucacus, it could also greatly worsen the already tense relations between Russia, Europe and the United States. With Russia having such a lock on energy supplies and with Georgia’s role as a conduit for oil that is free of Russian influence, this could have serious consequences for the global economy.

Russia is in a determined mood and is actively encouraging secessionists in South Ossetia and the other breakaway region of Abkhazia. It appears that Moscow has calculated that it can destabilise Georgia through such a showdown and there is precious little that the United States can do about it. Moscow’s military intervention will have the dual purpose, it reasons, of creating an unstable Georgia that therefore cannot join Nato and at the same time demonstrating to the West that it has gone too far. The problem with such a strategy is that it can destabilise other regions and flare out of control. Moscow is playing with fire.