Georgia on Monday freed four Russian military officers at the center of a spying row while Moscow clamped an economic blockade on the country and warned the US against encouraging "destructive policies" from the government in Tbilisi.
Three days after Georgian authorities ordered that the four men be held for two months pending investigation on espionage charges, they were handed over to the visiting head of the Organization for Security and Cooperation in Europe (OSCE) and returned to Russia.
In a deal Georgian President Mikhail Saakashvili said was made to appease Western "friends" and not a product of Russian pressure, the four Russian officers were given to the OSCE in a carefully choreographed ceremony under the media spotlight in central Tbilisi.
"This is a goodwill gesture to our European friends and allies," Saakashvili said at a news conference before the four suspects were handed over. "It is in no way a response to pressure."
As the officers stood flanked by police guards, a Georgian official read a statement to each individually, informing them that they had been charged with espionage and would not be permitted to set foot in Georgia again, before they were passed to OSCE officials.
The men, wearing civilian clothes and holding small plastic bags with personal effects, said nothing and showed no emotion as they were escorted to waiting OSCE vans and taken to the airport where they boarded a Russian plane and later left for Moscow.
The four men were met at a Moscow airport by Russian Defense Minister Sergei Ivanov, RIA Novosti said.
Russia meanwhile announced a lengthy series of punitive economic measures against Georgia including the suspension of all air, sea, rail and road links as well as deliveries and money transfers made through the Russian postal system.
The coordinated measures, which also included a prohibition on the purchase of certain spare parts from Georgia, were likely to have an immediate and painful effect on Georgia, whose economy is heavily reliant on trade with Russia.
One Russian official quoted in the daily Kommersant on Saturday, said money transfers from Russia to Georgia alone accounted for 20 percent of Georgia's US$6 billion GDP last year.
The bulk of these funds -- around US$1 billion -- was sent from Russia to Georgia either by transfer through the postal system or else carried by hand using transportation links that have now been suspended.
Speaking to reporters in Tbilisi, the OSCE chairman-in-office, Belgian Foreign Minister Karel De Gucht, called for Russia to lift the transport and postal restrictions. There was no indication however that Russia was rethinking the measures following the release of the suspects.
But Georgian Foreign Minister Gela Bezhuashvili downplayed the effect the Russian embargo would have, saying that "the people are ready to pay the price," at a press conference.
Remittances to Georgia were, he said, "a significant part of the GDP, but not as damaging as some people count in Moscow."
Russian President Vladimir Putin warned US President George W. Bush against any moves by "third countries" encouraging "destructive policies" in Georgia, the Kremlin said Monday.
In a phone conversation with Bush, Putin "underlined the unacceptability and danger to the peace and stability of the region of any actions by third countries that could be interpreted by the Georgian leadership as encouraging their destructive policies."