ANALYSTS' VIEW: Tension mounts over Georgia

(Reuters) - Tension remained high in Georgia on Thursday, with Russian troops and armor moving around three towns inside the country and ignoring demands by Washington that Moscow respect its territorial integrity.

Moscow also clashed with Georgia's ally Ukraine over the movements of Russia's Black Sea fleet after Ukraine's president decreed Russian warships obtain permission before entering or leaving their base in the Ukrainian port of Sevastopol.

Following are comments from security, political and economic analysts:

MICHAEL COX, PROFESSOR OF INTERNATIONAL RELATIONS, LONDON

SCHOOL OF ECONOMICS

"This is going to be a defining crisis in the United States-Russian relationship. The danger is that neither side feels it can back down.

"The Russian role in Georgia has massive implications for the Russian role in Ukraine and the Baltic republics. Not surprisingly, they are taking an increasingly strong line on this because they see this as a defining moment for their relationship with Russia.

"We may only be at the beginning of this crisis rather than in the middle or at the end of it.

"If this thing escalates we could possibly see differential relations within NATO -- we are at one of those crossroads. The last thing many European members of NATO would want would be a kind of showdown. They have very close relations. Russia is Europe's third largest trading partner. There is massive economic involvement between EU countries and Russia and many are energy dependent on Russia.

"They will not want to threaten that. On the other hand, the U.S. is taking a tougher line and so we could be heading -- not just for an increasing showdown with the U.S. and Russia which could get very nervy -- but we could also be leading to some very difficult discussions going on in backrooms between European countries and the Americans."

MICHAEL DENISON, RUSSIA EXPERT, CHATHAM HOUSE THINK-TANK

"I think they (all sides) will know where to draw a line to prevent further escalation."

"Clearly it could do (escalate) if there are flashpoints -- if for example, there is a standoff between Ukrainian and Russian naval forces or if U.S. forces are impeded, obstructed or fired upon while (under)taking humanitarian work. Those are areas where there could potentially be a flashpoint."

"It's in nobody's interest for this to escalate to a regional conflict."

"What happened in Georgia could directly impact on Ukraine if, for example, the political divisions in Ukraine solidify and become violent in any way. What this could do is set a template for Russian intervention in a sovereign state."

GEOFF SMITH, STRATEGIST, RENAISSANCE CAPITAL

"A conflict is in neither Russia nor Ukraine's interest. Trade between the two has been rising at 30 percent a year. The price moves today are understandable but not really justified."

"Unfortunately, the gas deal with the Russians has not yet been signed and this could make it more difficult. A sudden adjustment to market prices for gas next year would be hard for the economy to absorb."

"On a five-year outlook, you can be very bullish on Ukraine and it will become more integrated with the European Union, especially as the Free Trade Area negotiations will Europeanize the whole of business. On a one-year horizon, it is going to be tougher."

CLIFF KUPCHAN, DIRECTOR EUROPE AND EURASIA, EURASIA GROUP

"A significant uptick in fighting is on balance unlikely, given President Medvedev's 12 August statement that hostilities are almost complete and the 13 August informal ceasefire."

"The chance of an incident is very low, as the risk to both sides is obviously extremely high. But some danger is created by ambiguity in the terms of the "ceasefire" and by the chance that a separatist could try to trigger an incident."

Both political and market risks flow from increasingly clear Russian goals... Russia seeks control over the separatist regions -- their return to Georgia is extremely unlikely.

"The informal ceasefire, U.S.-Russian interactions and Moscow's intentions all create risk. The Georgian-Russian war has already changed Eurasia's political and economic landscape."

"Moscow henceforth will be very hard for the US to work with on Iran or other key issues."

ONDREJ SOUKUP, ASSOCIATION FOR INTERNATIONAL AFFAIRS, PRAGUE

"The current crisis shows Russia has gained self-confidence, that it is no longer willing to play the part of the inferior partner, one which the United States does not have to take into account."

"That showed with Kosovo, where the Russian objections were not taken into consideration at all. The same applies to Georgia's possible NATO entry, which Russia fiercely opposes."

"Russia basically says: 'you have recognized Kosovo, we shall recognize South Ossetia and Abkhazia'."

"The perspective of Georgia entering NATO is weak now, since the Russian forces have practically destroyed the Georgian army... Russian tanks are driving back and forth through Georgia at will."

LUIS COSTA, COMMERZBANK DEBT STRATEGIST

"It's a perfect storm for Ukraine at the moment... The government has made it clear that it is on a collision course with Russia and there are other issues as well."

NEIL SHEARING, EMERGING EUROPE ECONOMIST, CAPITAL ECONOMICS

"The idea that you get one of these flare-ups in tensions that involve military conflict that would then just die down overnight was somewhat misplaced."

"All you can really say is that we'll have kind of focus on the more medium term issues and try to see through this bout of political risk."

"It's certainly true that the longer this goes on, the bigger hit Russia's image is going to take in the West.

"But at the same time, there is a change of administration in Washington at the end of the year, and there has been a change in Moscow. Although Putin's prime minister, whether you like it or not, we do have a more dovish president in place now, whether he's pulling the strings or not."

"So I suspect that over the course of the next 12 months we'll get a rowing back in positions. That's not withstanding the occasional flare-up in tensions in the mid-term."