Rice says Russia becoming isolated over Georgia

By Axel Bugge

LISBON (Reuters) - Russia is becoming more isolated by its actions in Georgia and understands there are costs for its behaviour, U.S. Secretary of State Condoleezza Rice said on Friday.

"The Russians are beginning to understand that there are costs to this kind of behaviour," Rice told reporters after a meeting with Portuguese Foreign Minister Luis Amado.

"I am quite sure that Russia understands that it's deepening its isolation and that it will have no way out unless it honours its commitment," she said, referring to a peace plan negotiated by French President Nicolas Sarkozy.

Russia invaded U.S. ally Georgia in a five-day war last month and recognized the country's breakaway regions of South Ossetia and Abkhazia.

"Isolation (of Russia) is not what we want," Amado said, referring to the European Union, which held an emergency meeting this week over Russia's action in Georgia.

Rice said it was unacceptable that Russia had not respected the conditions of a ceasefire plan by Sarkozy.

"I find it extraordinary that the president of Russia has not lived up to the obligations that he undertook to President Sarkozy," she said.

At this week's EU meeting on Georgia, the bloc condemned Moscow for its behaviour but held back from launching sanctions against Russia, one of its biggest energy suppliers.