NATO is not seen as the only problem. If Ossetia is taken by Georgia, there are fears of genocide, or at least general instability. If this occurs, the entire area might go the way of Chechnya and cause total chaos. That is the primary concern of the Russian Government in the region.
Saakashvili, who won his election along with the promise that he will "win back" breakaway regions, started this mess, on the day the Olympics start no less, because he feels the West will back him through any move he makes, despite the fact he has a controlling government that sends riot police after anti-government protesters, who on occasion end up in hospitals. Put yourself in one of those breakaway republics for a moment. Would you want to join a guy who bombs you into oblivion and will probably try to finish the job afterward, or a much more stable country that at present has tried to protect you and whose country pays the average worker four times as much?
I can't say with a straight face that Russia is 100% in the wrong here.
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