Divide and Conquer

Last week the American guided-missile destroyer USS Donald Cook steamed into the Black Sea port of Odessa flying the stars and stripes. Ukraine's top military brass welcomed her in, along with officers from Armenia, Azerbaijan, Georgia, Greece, Latvia, Macedonia, Moldova, Romania and Turkey—all in Ukraine for a major joint exercise with NATO code-named Sea Breeze 2007.

No wonder Russia feels a little paranoid. A battle for influence—or new Great Game between Moscow and the West—now stretches from the Arctic to the Middle East and Central Asia. Vladimir Putin may talk of restoring Russian might, but the reality is that the Kremlin's sway over its neighbors has declined dramatically under his watch. Since Putin came to power in 2000, NATO has signed up Estonia, Latvia and Lithuania and is actively courting Ukraine, Georgia and Moldova—all of which have also shaken off pro-Moscow governments and are busy building ties with the West.

"We, Russia's neighbors, are not Russian property, but living, developing organisms," Georgian President Mikhail Saakashvili told NEWSWEEK. "We decided to break free. The Kremlin believes we became part of the American camp, but that is not exactly true—the truth is that we are connected by common democratic values."

The resurgent Kremlin, meanwhile, is doing everything it can to claw back its lost influence. Moscow's top priority: to stop the United States from encroaching on post-Soviet space. First and foremost, that means killing off U.S. plans to install antiballistic-missile batteries in Poland and radar in the Czech Republic—notionally intended to protect Europe from Iran, but which the Kremlin believes could be a threat to its own nuclear capability.

Vladimir Putin has been collecting diplomatic chips around the world in order to push the United States back. Moscow continues to oppose Kosovar independence, hoping at some point to trade it for an end to NATO expansion or missile defense. Russia has also been playing a double game on Iran, supporting U.S.-led calls to isolate Tehran through sanctions as punishment for its nuclear program while at the same time inviting Iran to join the Shanghai Cooperation Organization, an alliance of Asian states led by Russia and China. "Russia shares American fears [on Iranian nukes]," says regional analyst Vyacheslav Polikarpov of the Russian Academy of Sciences. "But Putin also wants Iran as an ally to counter American influence in the region."

Moscow is also indulging in some old-fashioned saber-rattling to press the point. Earlier this month Russian First Deputy Prime Minister Sergei Ivanov threatened to deploy cruise missiles in the Russian enclave of Kaliningrad—which sits between Poland and Lithuania—if Washington presses ahead with missile-defense plans.

Russia's most powerful strategic weapon is not nukes, however, but energy supplies. "It's hard to stand up to Russia if you know that they can shut down your economy within days," complains a top Eastern European diplomat in Kiev not authorized to speak on the record. Already, Russia controls nearly a third of Germany's natural-gas supplies, which has weakened Chancellor Angela Merkel's willingness to put real pressure on Putin regarding human rights. "The West sold Russian democracy down the river in exchange for oil and gas," complains former Russian deputy prime minister Irina Khakamada.

Gazprom, the Russian natural-gas giant, is cutting deals with Bulgaria, Hungary and Italy aimed at undermining European efforts to build a pipeline that would bring gas directly from Azerbaijan, bypassing Russia. Putin has also held talks with gas producers Iran, Qatar and Algeria to set prices and divide up markets.

Russia's neighbors—backed sporadically by the United States—have started fighting back. New pipelines allow Azerbaijan (and soon Kazakhstan) to export oil directly to the Mediterranean and gas to Turkey - if not yet direct to Europe. And GUAM, an alliance comprising Georgia, Ukraine, Azerbaijan and Moldova, agreed last year to use pipeline from Odessa to the Polish border to transport Azeri and Kazakh oil to Eastern Europe. NATO, too, has increased joint exercises with former Soviet states and is trying hard to persuade neutral Sweden and Finland to join.

Will the upshot of all this strategic maneuvering be a new Iron Curtain drawn between Russia and its neighbors? Saakashvili, for one, hopes not. "We have so much in common with Russia," he says. "I believe that all the anti-American statements we hear from the Kremlin today are a temporary thing—in reality, the Russian elite want to be a part of Europe." But for as long as the Kremlin continues to dream of restoring its empire, Russia's neighbors will prefer to fly their flags alongside Old Glory, just to be on the safe side.