Relations between Russia and the West are also set to worsen further, said Jane's Eurasia editor Matthew Clements as Russian forces were reported to have moved further into Georgia from the separatist region of South Ossetia.

"Air strikes are likely to continue for the immediate term as Russia seeks to further degrade Georgia's military capabilities," he said in an updated analysis of the fast-developing situation.

"The current conflict faces a real risk of escalation and expansion, most prominently in Abkhazia where the likelihood of an operation to clear Georgian forces from the Kodori Gorge appears increasingly likely," he added.

Abhkazia in western Georgia, is the other separatist enclave resisting rule from Tblisi and receiving support from Russia.

This Kodori Gorge operation "could elicit a military response by Georgian forces deployed to the south of the separatist region," he added.

On the diplomatic front, "European and US criticism of Russia's response is likely to lead to a further downturn in Russo-Western relations, although any more serious diplomatic responses will likely be dependent upon Russian actions over the next few days," he said.

"Overall, Georgia is facing reduced control over both Abkhazia and South Ossetia (and) a short- to medium-term reduction in its military capabilities," he said.

In addition, Georgia's hopes of one day joining NATO have been "greatly reduced," he said, because the Alliance was "likely to view Tbilisi's actions in South Ossetia as being far too unpredictable for a potential alliance member."

The comments came as a key Georgian official said Russian forces had occupied the city of Gori in Georgia, which lies outside South Ossetian territory.

Georgian forces were fortifying positions near Tbilisi to defend the capital, the secretary of Georgia's security council, Alexander Lomaia told AFP.

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