SNAP ANALYSIS: Russia, NATO bicker after resuming ties

MOSCOW (Reuters) - NATO has expelled two Russian diplomats over a spy scandal, a move Moscow's ambassador to the military alliance said was intended to set back efforts by Russia and the United States to repair relations.

Tensions between the former Cold War foes also rose on Thursday over pacts which Moscow said it signed with two rebel Georgian regions, giving it control over their borders.

The following are the key issues:

* NATO's expulsion of two Russian diplomats -- including the son of Russia's Brussels-based ambassador to the EU -- deals a new blow to efforts aimed at mending ties that were frozen after Russia's war with Georgia last August.

Analysts said the timing of the expulsion was unusual. It came Wednesday, the same day that the alliance resumed formal talks with Russia at ambassadorial level.

Russian President Dmitry Medvedev said the expulsions amounted to a challenge from the West and the Foreign Ministry said they were driven by elements inside the Western alliance that wanted to undermine ties with Moscow.

Russia's ambassador to NATO, Dmitry Rogozin, said Moscow's response would be "harsh and decisive." He did not elaborate, but previous spy rows between Russia and the West have often led to tit-for-tat diplomatic expulsions which run the risk of drawing both sides into an escalating cycle of retaliation.

* The day after Moscow was informed of the planned expulsions, Russia took formal control over the de-facto borders of South Ossetia and Abkhazia, two Moscow-backed regions that broke away from Georgian rule in the 1990s.

Russia views NATO with deep suspicion but Medvedev says he wants to mend ties with Washington after relations sank to post-Cold War lows under former U.S. President George W. Bush.

Analysts said the Kremlin may be seeking to test the nerves of NATO members now Barack Obama is in the White House.

* NATO exercises in Georgia next week, another source of tension with Russia, were planned long ago, though Moscow voiced sharp criticism when the war games were formally announced.

NATO says the exercises, to be held 20 km (12 miles) east of the capital Tbilisi, were planned last year. Russia was fully informed and as a NATO partner country had been free to participate, diplomats said.

The Kremlin warned that the games amounted to muscle-flexing by the alliance. Medvedev has been careful to underline that they could harm the resumption of ties with the alliance.

Both Georgia and Russia have accused each other of massing troops at the de-facto borders between Georgia and South Ossetia and Abkhazia.

* Russia strongly opposes the NATO ambitions of Georgia, with which it fought a brief war last year. It is upset by what it describes as NATO support for the ex-Soviet republic, a crucial transit route for Caspian Sea oil and gas to Europe, long controlled by Moscow.

NATO has made it clear that membership for Georgia and another former Soviet republic, Ukraine, is a long way off given concerns among some European countries such as France and Germany about the effect on relations with Moscow.

(Reporting by Guy Faulconbridge, editing by Mark Trevelyan)