Georgia is certainly on the brink of civil war. The existing Shevarnadze government has been working diligently in recent months to secure very lucrative gas and oil contracts, both with neighboring states and the export market. The gas and oil investors and speculators will now shy away from Georgia until the political crisis is solved - one way or another. Zurab Zhvania and Mikhail Saakashvili have both openly expressed that they will accept nothing less than Shevarnadze's resignation, and no doubt that of any of his supporters in Parliament. Russia has dispatched their Foreign Minister to Georgia, and it will be interesting, to say the least, to see what develops out of that venture. If Russia turns its favor toward Revival Union, the opposition party the Shevarnadze has had some success in working with, then we could see a compromise in which Aslan Abashhidze is more or less "installed" as President. While this may be popular in the Ajarian region, certain other tribal factions may still oppose the move, and the country could disintegrate into a number of regional groups fighting each other for stakes in whatever remains. A civil war in the Caucasus states could make the Balkans look like a rugby scrum, in my opinion. There are nuclear-capable forces that could be threatened by prolonged instability in the region, not the least significant of which is Ukraine. Ukraine could join a pitched battle between any two particular factions on the side of the one that would afford the greatest public support upon a decisive victory. I would think that we could have a shooting war in the Caucasus before the end of this winter. I certainly hope hot, but it's possible. I hope that Putin's new strategy guy, Anatoly Kvashnin, can be a voice of restraint, but the guy smacks more than a little of Andropov. Delicate days, indeed.
Edited to clarify that although Ukraine itself is not really in the Caucasus, the fact that it is a nuclear-capable state with clear interest in the Black Sea, make it the foremost third-party concern with regard to a Georgian melt-down. I would not concern myself too much with the effect of Armenia or Azerbaijan, insofar as they cannot afford to project any type of force beyond their own tenuous grasp on stability. Iran, I think, will stay out of this one, unless Russia acts with force inside Georgian borders, which will no doubt threaten Iran's interests directly. Turkey is ideally placed to serve as a staging ground for US intervention, by the way. We may be in this one yet.