Well the Georgians called for this, really. Aside of being insolent and scurrilous towards every nation around them including Russia they were looking towards Osetya already since a long time. A small part of Osetya is a disputed area, which Georgia always tried to lay a claim on though Osetya never gave in. As it seems, now Georgia got fed up with trying to enlarge it's territory passively and went over to barbaric methods.
As for Russia, I'm not sure why they intervene but I would say it's to side with Osetya which would be understandable, however they only blow this small war even more up. They might be able to suppress the war quickly, but it would be on cost of a huge number of dead. They oil pipe might play a role there too, but seeing as the oil supply around the world seems to wane rapidly that's to be expected.
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