Now that a peace accord has been signed by both parties to the Georgian-Russian conflict, it�s time to reflect on gains and losses. With hundreds, if not thousands, dead and upwards of 100,000 refugees, ordinary people have once again borne the brunt of reckless decisions made by their governments.

As the fog of war dissipates, it�s obvious that the biggest loser was its instigator. Georgia�s US and Israeli-trained and armed military has been humiliated and the lack of resolve of its allies exposed. It�s further clear that Georgia�s sovereignty rests entirely on Moscow�s goodwill.

As I write, there are Russian tanks just 25 miles from the Georgian capital Tbilisi. Their very presence signals who�s in charge; they don�t even have to fire a shot. Unfortunately, President Mikheil Saakashvili still hasn�t got the message. He�s still claiming his country will never surrender (although it has) and he gets no marks for diplomacy after calling the Russians 21st century barbarians.

Moreover, the breakaway Georgian provinces of South Ossetia and Abkhazia that Saakashvili promised to return to the national fold are probably lost forever as under the terms of the peace accord, Russian peacekeepers have a right to not only control the enclaves but also a corridor within Georgia proper outside the disputed zones.

In the end, Saakashvili gained nothing by his foolish misadventure except the temporary support of his own electorate, which had little choice other than to back him up while under siege. Once the Russians have left, the Georgian president is likely to pay a heavy political cost.

While nominating the biggest loser is relatively simple, working out who is the biggest winner warrants rather more analysis. Let�s start with Russia.

The Russian Prime Minister Vladimir Putin must have derived some satisfaction from giving Saakashvili -- a man for whom Putin harbours a visceral dislike -- a bloody nose.

In Putin�s eyes, Saakashvili is a man who is collaborating with Western power against Moscow�s interests; firstly due to his eagerness to join NATO and secondly because of his enthusiasm for the Baku-Tbilisi-Ceyhan pipeline, which resulted from a US plan to cut Russia out of the Caspian energy equation.

Russia has also successfully challenged the lone superpower and shown that not only does it still possess heavy muscle, it isn�t vulnerable to US threats. Its aggressive response to Georgia�s belligerence can also be construed as a firm message to former Soviet states to the effect the Russian bear is once again on the prowl.

But Russia�s gains, through impressive, may be superficial and short-lived.

In fact, the biggest winners are the more hawkish elements of the US government. Georgia served as their sacrificial lamb in an effort to force Moscow to unveil so that Russia could reoccupy its pinnacle as enemy of the West. After all, the �War on Terror� was getting old and confronting Iran turned out to be more complicated than initially thought.

New enemy

The military-industrial complex needed a new enemy to provide a pretext for its growth and has now got a tried and true remodelled one. And, indeed, the Western media have once again obliged, consistently ignoring the facts to paint Russia in the worst possible light in the same way it coloured Iraq in the run-up to the 2003 invasion.

There has also been an important knock on effect, which may or may not have been part of Washington�s plan. Russia�s role in the conflict served to push Poland off its fence to agree to US interceptor missiles being stationed on its soil. The Czech Republic has already agreed to accept US radar installations, and now Ukraine is apparently clamouring to get in on America�s missile shield deal under which participants are promised Washington�s protection.

Now that the gloves are off, former Soviet states can no longer straddle the divide. Theirs is an invidious position. Their firm alliance with the West makes them Russia�s enemies; particularly uncomfortable given their proximity to Moscow, which has already warned Poland that it�s now become a potential nuclear target.

In the meantime, the US and Europe are threatening Russia with suspension from the G8 and are warning that its future membership in the World Trade Organisation is at risk. But Russia isn�t Iran or North Korea and attempting to isolate it could be a highly dangerous strategy especially for Western Europe which is reliant on Russian gas.

A surprise winner could be Republican presidential hopeful John McCain, whose experience and military credentials may give him an edge over the new kid on the block in light of a new US-Russian face off.

Last, but not the least. Kudos to McCain, George W. Bush and Condoleezza Rice for providing some comic relief.

In the 21st century nations don�t invade other nations, said McCain, who must have been experiencing a �senior moment.�

Bullying and intimidation are not acceptable ways to conduct foreign policy in the 21st century, said Bush, forgetting that people in glass houses shouldn�t throw stones.

But it was his secretary of state who brought tears of mirth to our eyes with �This is not 1968 and the invasion of Czechoslovakia where Russia can threaten a neighbour, occupy a capital, overthrow a government and get away with it.� Is this a case of early onset Alzheimer�s or chronic double-standards?