Russia becoming isolated over Georgia: Rice

By Axel Bugge

LISBON (Reuters) - Russia is becoming more isolated by its actions in Georgia and understands there are costs for its behavior, U.S. Secretary of State Condoleezza Rice said on Friday.

"The Russians are beginning to understand that there are costs to this kind of behavior," Rice told reporters after a meeting with Portuguese Foreign Minister Luis Amado.

"I am quite sure that Russia understands that it's deepening its isolation and that it will have no way out unless it honors its commitment," she said, referring to a peace plan negotiated by French President Nicolas Sarkozy.

Russia invaded U.S. ally Georgia in a five-day war last month and recognized the country's breakaway regions of South Ossetia and Abkhazia.

"Isolation (of Russia) is not what we want," Amado said, referring to the European Union, which held an emergency meeting this week over Russia's action in Georgia.

Rice said it was unacceptable that Russia had not respected the conditions of a ceasefire plan by Sarkozy.

"I find it extraordinary that the president of Russia has not lived up to the obligations that he undertook to President Sarkozy," she said.

At this week's EU meeting on Georgia, the bloc condemned Moscow for its behavior but held back from launching sanctions against Russia, one of its biggest energy suppliers.

Rice said she was satisfied with the reaction of Europe and other allies over Georgia. Washington has taken a harder line on Russia and is considering sanctions.

"I am satisfied with the result we are getting," she said. "I believe that together we are making it difficult for Russia to achieve its objectives."

Moscow has argued that its action over Georgia's breakaway regions was similar to the west's support of Kosovo, which won recognition by the U.S. when it declared independence early this year. Rice said Kosovo and Georgia were different situations.

"First of all, Kosovo was a unique situation, it came about after the collapse of Yugoslavia," she said, adding that Kosovo's independence move happened after an extended process.

"We shouldn't allow that argument to be made," she said, referring to comparisons between Kosovo and Georgia's situation.

Amado said some analyses had drawn parallels between the two, but added: "We are dealing with different situations."

The regions of Abkhazia and South Ossetia broke their links with Tbilisi in 1992, following the collapse of the Soviet Union.

(Reporting by Axel Bugge and Sue Pleming)