U.S. warns of punitive measures against Russia

By Sue Pleming

NEW YORK (Reuters) - Russia will face a "very strong reaction" from Washington and others if it does not meet an October 10 deadline to withdraw troops from "security zones" around Georgia's breakaway regions of South Ossetia and Abkhazia, a senior U.S. official said on Thursday.

Daniel Fried, U.S. Assistant Secretary of State for European Affairs, said Moscow would find itself more isolated and its reputation further damaged if it did not comply with obligations laid down in a French-brokered ceasefire deal.

"Does Russia want to be seen as even more risky to do business in than it is now? What kind of a long-term relationship does Russia want to have with the world?" he told Reuters in an interview.

"If the Russians have not complied by October 10 there would be a very strong reaction," Fried added.

Russia has said it will pull out the forces in the security zones by then, but that it will keep a planned 7,600 troops in the two separatist regions indefinitely -- more than twice the number it had before its brief war with Georgia. Washington and others strongly oppose this.

The withdrawal of troops from the security zones around the breakaway regions is conditional on deployment of an international force of ceasefire monitors, including a 200-strong European Union contingent.

Georgia tried to retake control of South Ossetia in early August but its troops were quickly repelled by Russian forces. In the battle, Moscow's troops drove deep into Georgian territory, drawing international condemnations.

NOT JUST "A BUMP IN THE ROAD"

The United States has been mulling a range of measures against Russia but is waiting to see if it meets the deadline.

Fried declined to say what was under consideration, but the Bush administration has used sanctions broadly to punish nations like Iran and North Korea for their nuclear programs, targeting companies with links to those governments.

U.S. Secretary of State Condoleezza Rice discussed with European allies on the sidelines of the U.N. General Assembly this week how to handle what she sees as Russia's increasingly "dark turn" and aggression toward its neighbors.

"The problem with Russia's invasion of Georgia is that it is not just a little hiccup or bump in the road. It is a major problem because Russia has tried to change international borders by force and that is quite a sobering thought," said Fried, who sat in on a meeting between Rice and Russian Foreign Minister Sergei Lavrov on Wednesday.

"Russia is going to have to choose how far outside the international community it wants to place itself," he said.

He said European nations had expressed solidarity with the U.S. view that Russia's actions must be confronted.

"There was a strong sense the Russia challenge had to be met and that no country in Europe should be left alone and isolated in dealing with Russia."