Tensions with Russia mounted after 4 Russian military officers detained by Georgian authorities for espionage 27 September. Russia suspended ongoing troop pullout from 2 Georgian bases 30 September, recalled ambassador and most diplomatic staff, halted issuance of visas, and asked UN Security Council to censure Tbilisi. President Saakashvili accused Russia in UN General Assembly speech of annexing Georgian conflict zones and perpetuating conflicts in. NATO invited Georgia to begin “Intensified Dialogue” on membership; move criticised by Russia. In South Ossetia, 3 Ossetians and 1 Georgian killed in exchange of fire 8 September. De facto South Ossetian president Kokoity announced independence referendum and presidential elections to be held 12 November; Joint Control Commission meeting cancelled. In Abkhazia, 1 civilian reportedly killed in clash between police and gunmen. 13 opposition activists charged for alleged coup plot; opposition said arrests political. Local elections due 5 October.

Tbilisi confirmed plans to install pro-Georgian Abkhaz government-in-exile in upper Kodori gorge, near Abkhazia conflict zone, and pledged major investment in infrastructure. De facto Abkhaz authorities and Russia objected to Georgian police presence in area, saying violation of 1994 Moscow agreement. Tbilisi agreed to UN inspection of gorge without Russian peacekeeping participation; CIS peacekeepers and UN observers carried out joint monitoring of rebel-held lower gorge 15 August. Joint Control Commission discussed South Ossetia 17-18 August: Georgia sought revisions of 1992 agreement on Russian-led peacekeeping and negotiation mechanisms before launch of internationally- funded rehabilitation program; Russia and South Ossetians reject any changes. Georgian local elections set for 5 October.

Tbilisi carried out special police operation 24-27 July in Kodori gorge, adjacent to breakaway Abkhazia, against renegade paramilitary leader Emzar Kvitsiani; 1 killed while Kvitsiani now in hiding. Parliament unanimously adopted 18 July resolution to suspend Russian peacekeeping operations in Abkhazia and South Ossetia and replace with international police force. Russia condemned resolution, stating would protect its citizens in both zones. Russia closed sole official crossing between 2 countries 8 July. 2 Working Groups on security and refugee return of Georgian-Abkhaz Coordinating Council met for first time in 5 years. In South Ossetia, de facto NSC Secretary Oleg Albarov killed in alleged bomb attack 9 July; de facto defence special unit head Bestauty escaped 14 July explosion which killed 2.

President Saakashvili met Russian President Putin before St. Petersburg G-8 summit amidst deteriorating relations; pledged to continue dialogue, but both later made accusatory statements on Georgia’s breakaway regions. On South Ossetia, international donors conference in Brussels raised €7.9 million to finance rehabilitation of conflict zone; Georgia pledged to match sum and Russia promised €3 million. Georgian minister of interior met with his de facto South Ossetian counterpart within Joint Control Commission for first time. On Abkhazia, UNSG’s Group of Friends on Georgia met with officials in Tbilisi and Sukhumi 23-25 May, welcoming resumption of Coordinating Council. First meetings of Council’s working groups on security and IDP postponed until July.

Following April import ban on Georgian wine and brandy, Russia banned mineral water, one of Georgia’s biggest exports. First convoy of Russian military equipment moved from Akhalkalaki base to Armenia 18 May. Georgian- Abkhaz Coordinating Council met in Tbilisi 15 May, first time since 2001; sides exchanged peace initiatives. UNSG’s Group of Friends for Georgia visited Tbilisi and Sukhumi 22-23 May. International Consortium of Black Sea Railways set up to address restoration of Abkhaz section of Russian-Georgian railway. Joint Control Commission meeting on South Ossetia held 11-12 May; sides agreed to 14 June donor conference. Georgia criticised arrival of 500 Russian troops in South Ossetia without visas as illegal; Russia said standard rotation.

Bilateral relations with Moscow strained by Russian ban on Georgian (and Moldovan) wine and brandy. Moscow cited consumer safety, but Tbilisi condemned move as political. Parliament ratified bilateral agreement on Russian military base withdrawal 13 April. 37 opposition MPs began boycott of parliament 1 April, demanding changes to new election code to give more autonomy to local government and dismissal of interior minister; ruling party rejected conditions.

Relations with Russia thawed after sides resolved visa row and signed agreement on Russian withdrawal of military by 31 December 2007. Joint Control Commission meeting held in North Ossetia 27-28 March; agreed to reconvene in Tskhinvali in April. Head of Abkhaz government- in-exile Irakli Alasania appointed Georgian presidential envoy to negotiations with Abkhazia. Alasania met with de facto Abkhaz FM Sergei Shamba, agreeing to revive bilateral talks through Georgian-Abkhaz Coordinating Council, suspended since 2001. Abkhaz officials blamed Georgia for 8 March shooting of 4 civilians; Tbilisi denied charge. UN Security Council extended UNOMIG mandate until 15 October. Unrest increased in Javakheti region after death of ethnic Armenian in clash with Georgian youths 9 March.

Tensions escalated between Georgia and Russia over South Ossetia. Parliament adopted resolution, watered-down under international pressure, instructing government to replace Russian peacekeepers with international forces, while Russia announced visa halt for Georgians. Joint Control Commission meeting planned in Vienna 20-21 February cancelled, replaced by meeting in Moscow not attended by Georgia or OSCE. Tense situation in conflict zone continued: Georgia detained 3 Russian officers for visa violation, and Georgian and Russian troops set up tit-for-tat roadblocks. UN- led Georgian-Abkhaz negotiations in Geneva 2-3 February failed to finalise agreement on non-resumption of hostilities or set date for both sides’ leaders to meet.

Unexplained explosions on Russian gas pipeline and electricity line 22 January sparked major energy crisis: power restricted to essential services, though situation returned to near normal at month-end. Georgian government suggested Moscow masterminding crisis for political aims; Moscow accused Tbilisi of “hysteria”. Security situation in Gali region of Abkhazia remained tense as Georgian media reported kidnappings, death of power plant worker, while Abkhaz media reported renewed Georgian guerrilla activity. Tbilisi and Abkhaz authorities continued negotiations on security guarantees, agreed to intensify crime prevention cooperation in conflict zone. Joint Control Commission meeting on South Ossetian conflict cancelled after disagreement on location. UN Security Council extended mandate of UNOMIG peacekeeping force in Abkhazia until 31 March, but Russia withdrew support for plan based on greater Abkhaz autonomy within Georgia.

Joint Control Commission met in Moscow 27-28 December amid tense security situation in South Ossetia conflict zone. Earlier South Ossetia’s de facto president Eduard Kokoity presented his peace proposals to Presidents Putin and Saakashvili, largely matching 3-stage plan proposed by Tbilisi and supported by OSCE. Despite frequent security incidents in Abkhazia’s Gali region, sides neared agreement over documents providing for international guarantees on non- resumption of hostilities and return of internally displaced.