Georgia said it put down a mutiny at a military base and accused
Moscow of trying to foment a wider rebellion on the eve of NATO war
games in the former Soviet republic.
Russia, which fought a war with neighbouring Georgia last year, denied involvement and said President Mikheil Saakashvili was trying to shift the blame for his domestic problems.
Georgia's opposition said the incident was a show to deflect attention from weeks of street protests against the president.
About three hours after news broke of a military uprising, around 30 tanks and armoured personnel carriers entered the tank base 19 km from Tbilisi, followed later by Saakashvili and the defence and interior ministers.
It was not clear how many of the 500 soldiers at the base were involved, but their commander was arrested and police said several other former military officers were being investigated.
A security source said 38 officers were being questioned.
Saakashvili called the rebellion at the Mukhrovani base a serious threat aimed at disrupting month-long NATO military exercises, due to begin on Thursday at a former Russian air force base several kilometres from Mukhrovani.
Russia has condemned the planned exercises as an attempt at muscle-flexing.
A senior Georgian security official said the exercises might be
postponed for several days.
Earlier, Russia's Interfax news agency said Mukhrovani base commander Mamuka Gorgishvili had made a statement criticising Saakashvili's government but pledging not to intervene by force in the stand-off on the streets between opposition supporters and the authorities.
"One cannot look calmly at the process of the country falling apart, at the ongoing confrontation. But our tank unit will not resort to any aggressive actions," the agency quoted Gorgishvili as saying.
Pentagon: Isolated incident
Defence Minister David Sikharulidze told Rustavi 2 television the rebellion was also an attempt at a military coup.
Authorities later distanced themselves from the term 'coup',
saying the main aim was to disrupt the NATO exercises.
A spokesman for the US Pentagon said the mutiny appeared to be a fairly isolated incident at this point.
Saakashvili accused the plotters of links to Moscow and demanded neighbouring Russia refrain from provocations.
Russia said the Georgian accusations were insane.
"Today what is happening is what we have always feared - the Georgian leadership are trying to shift their domestic problems on to Russia," Russian Deputy Foreign Minister Grigory Karasin told reporters.
"Instead of dialogue inside the country, the Georgian leadership is trying to accuse Russia of totally insane things."
Military experts in Tbilisi suggested the rebellion could be linked with plans to use troops to end opposition road blocks paralysing Tbilisi, with some officers refusing to participate.
"This chimes with what we are hearing from military sources," a
senior Western diplomat said.
Georgia lost a brief war against neighbouring Russia last August when Russia crushed in days a Georgian assault on the rebel pro-Moscow region of South Ossetia.
Conflict over South Ossetia and another breakaway region,
Abkhazia, destabilised Georgia in the early 1990s.
The August war slammed the brakes on Georgia's bid for membership of NATO, which the Kremlin fiercely opposes as an encroachment on its traditional sphere of influence.
It has also increased pressure on Saakashvili.
Ties between Russia and NATO have come under new strain over the exercises and the expulsion last week of two Russian diplomats accredited at Moscow's mission to NATO in Belgium.
Russian Foreign Minister Sergei Lavrov has dropped plans to attend a meeting of the NATO-Russia Council this month in protest at the expulsion. NATO said it regretted Moscow's decision and hoped a new date would soon be agreed for the talks.
Exercises in a madhouse
The mutiny had little impact on financial markets. Georgian assets are little traded and investors have been sceptical in the past of official statements until facts were clear.
Fitch ratings agency said it would likely cut Georgia's B+ debt rating if political instability continued.
Russia's NATO envoy Dmitry Rogozin said NATO would be better off holding its exercises in a madhouse since Georgia's military cannot properly receive their colleagues because they are rioting against their own president.
The NATO exercises from May 6 to June 3, involving around 1,000 soldiers are intended as a gesture of solidarity for Georgia, which sits at the heart of a region crucial for energy transit from the Caspian Sea to Europe.
They are due to take place around 70 km from the nearest Russian troop positions in breakaway South Ossetia.
Opposition protesters blocking streets in Tbilisi are demanding Saakadhvili resign over his record on democracy and the war, and say they will broaden street blockades to the main east-west highway and entrances to the capital.
"It's very clear the government just wanted to transfer attention to this (mutiny) from the protests," said opposition Conservatives leader Kakha Kukava.