The insider's guide to the Georgia spy row

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(CNN) -- Everything you should know about the ongoing Russia-Georgia spying row.

Russian spies in Georgia? I thought some of the folks in Atlanta looked a bit suspicious...

Wrong Georgia. The one we're talking about is on the Black Sea coast in the western Caucasus, squeezed between Russia and Turkey and home to around five million people. Until 1991 it was part of the Soviet Union and relations with Russia since have been strained at best and openly hostile since 2003's "Rose Revolution" when American-trained lawyer Mikhail Saakashvili replaced former Soviet foreign minister Eduard Shevardnadze as president.

So what's the problem this week?

Actually the current incident was sparked last Wednesday when the Georgians arrested four Russian military officers in Tblisi, the capital, and charged them with spying. Moscow immediately demanded their release, withdrawing its ambassador and other diplomatic officials. Russian president Vladimir Putin also accused Georgia of committing "state terrorism with hostage-taking," interpreted by some as a veiled threat to use military force.

And did Georgia back down?

Georgia released the four men to the Organization for Security and Co-operation in Europe on Monday in a move which Saakashvili described as a gesture of goodwill rather than a response to pressure from Moscow. But Russia indicated that the spying row was part of a wider dispute by imposing sanctions on its southern neighbor, including cutting all transport links and postal services.

What were four Russian military officers doing in Tblisi in the first place?

Russian has maintained two army bases and up to 4,000 troops on Georgian territory since the collapse of the Soviet Union, with a headquarters in Tblisi. Although Moscow has promised to withdraw them by 2008 it has broken similar commitments in the past. It also says Moscow has also sought to undermine Georgian independence by supporting separatist movements in the breakaway regions of Abkhazia and South Ossetia, where 2,500 Russian peacekeepers have been deployed. Both issues are seen in Georgia as symptomatic of Russia continuing to throw its weight around in a region it has dominated as an imperial power since the 19th century.

Anything else they're unhappy about?

Where do you want to start? Russia is disgruntled with Saakashvili's courting of Western allies, especially the U.S., and his ongoing efforts to join NATO, the Western military alliance, and the EU. Georgia has already reaped the benefits of closer relations with the West in the form of a new BP pipeline crossing its territory from Azerbaijan to Turkey that will break its dependency on Russian gas. Russia also accuses Georgia of supporting separatist rebels in nearby Chechnya and of allowing them to take refuge on Georgian territory. In a separate move justified by concerns over food hygiene, Russia has already banned food, mineral water and wines from Georgia, although the move was widely seen as politically motivated.

Is the situation likely to escalate any further?

Despite the release of the four men accused of spying, relations between Tblisi and the Kremlin appear to have broken down completely. Both the U.S. and the EU have called for Russia to lift sanctions but Russian foreign minister Sergei Lavrov on Tuesday rebuked Washington for "stimulating" Georgia into provoking Moscow. Meanwhile Russia's U.N. Ambassador, Vitaly Churkin, said he would propose a Security Council resolution Wednesday extending the U.N. observing force in Abkhazia and warning Georgia to refrain from further "provocative actions." Georgia responded by calling for Russia to halt naval exercises near the countries' sea border, calling them a threat to regional peace.