Georgia is also funding new development projects like roads, hospitals, police stations, theatres and health clinics in both territories to bolster support for the new governments.

In both cases, it is trying to challenge the authority of the respective de facto governments that have governed Abkhazia and South Ossetia since the early 1990s.

Georgian President Mikhail Saakashvili has said he intends to retake control of the renegade territories by 2009, and the new governments appear to be a key part of his strategy.

The US believes Georgia could be the vanguard of westernised, business-friendly reforms across the Caucasus and Central Asia, and is aggressively acting to strengthen Georgia from its Tbilisi embassy.

But Russia sees Georgia as a threat to its lucrative monopoly on natural gas exports to Europe, as a new oil and gas pipeline through Azerbaijan, Georgia and Turkey have, over the past two years, allowed petroleum products from the Caspian Sea to be exported to Europe without going through Russia.

Georgia insists it wants to resolve the conflicts peacefully, and given that its top foreign policy goal is joining Nato, which has said that a precondition for joining is not using force in Abkhazia or South Ossetia, a new war seems unlikely. Instead, it is proposing significant levels of autonomy for both territories.

In both the separatist capitals, however, the governments are making hay of the US-Georgia alliance and raising the spectre of a US-backed attack.

'The US and Nato give Georgia military support and because of that support, Georgian authorities conducted that operation in [Upper Abkhazia] and destabilised the situation. So there is only one way out - the military option,' said Abkhazia's foreign minister, Sergey Shamba. 'Peace in this region is on a dangerous edge.'

In the capital of South Ossetia, Tskhinvali, police and military appear to outnumber civilian men on the streets. The South Ossetian flag almost never appears without a Russian flag next to it, and billboards show Russian President Vladimir Putin with the caption 'Our President'.

There, Foreign Minister Murat Djioev said he appreciates the United States' position against military force in South Ossetia, but adds: 'Georgia is using this US military assistance to aggravate the relationship with us.'

Just a few kilometres to the north of Tskhinvali, the new pro-Georgia 'president', Dmitri Sanakoev, established himself in the ethnic Georgian village of Kurta last year.

After initially distancing itself from Mr Sanakoev, Georgia has now formally made him a representative of the Georgian government and is promoting him in the media and to the Tbilisi diplomatic community. On Friday, he addressed the Georgian parliament.

Tskhinvali officials have responded with an angry campaign against Mr Sanakoev. Officials accuse him of being involved in counterfeiting US dollars and say Georgia got him to take his position by paying off his gambling debts in Moscow. Posters in police stations in Tskhinvali portray Mr Saakashvili and Mr Sanakoev as Nazis, playing on their initials, SS.

Mr Sanakoev was a defence minister in the Tskhinvali government and fought against Georgia in the war, but said he changed sides when the government in Tbilisi changed.

'After the Rose Revolution [of 2003], the Georgian attitude toward South Ossetia changed fundamentally,' he said in an interview.

'In the past, there was Georgian extremism, which acted against South Ossetia, but today, it is democratising and it is free from those views. Today, they can accept autonomy for South Ossetia.'