Georgia has appealed for urgent international support against Kremlin "aggression" after Russian fighter jets reportedly attacked a village close to the capital Tbilisi.
The missile strike, responsibility for which was quickly denied by Moscow, dramatically worsened already tense relations between the ex-Soviet neighbours.
Farmers examine what is claimed to be a motor from the missile
The Georgian foreign ministry summoned Russia’s ambassador to Tbilisi and handed him a formal protest note that condemned the attack as "undisguised aggression and a gross violation of the country’s sovereignty."
Vano Merabishvili, Georgia’s interior minister, told The Daily Telegraph that two Sukhoi attack aircraft entered Georgian airspace from Russia at 7.30 pm on Monday night and fired at least one air-to-surface missile at the village of Tsitelubani, 40 miles west of Tbilisi.
The missile left a 16-foot crater in a field but failed to detonate. Sappers later defused the missile, fragments of which bore Cyrillic markings.
"We now have incontrovertible evidence that these aircraft travelled more than 80 km into Georgian airspace and fired a 1,000-kg precision guided, Russian-made missile," said Georgia’s foreign minister, Gela Bezhuashvili. The Georgian government later led Western diplomats on a tour of the site.
Officials also handed over evidence in the form of photographs and radar data to experts at the Organisation for Security and Co-operation in Europe (OSCE).
Georgia has complained of repeated violations of its airspace and claimed in March that Russian helicopter gunships opened fire on the country’s remote Kodori Gorge, close to the Moscow-backed breakaway region of Abkhazia.
A United Nations investigation ruled, however, that there was insufficient evidence to blame Russia conclusively. With the latest attack considered a greater provocation because of its proximity to the capital, Georgia is keen to ensure that there are no such doubts this time.
"We believe the muted international response after the Kodori incident acted as a green light for Russian adventurism," Mr Bezhuashvili said. "We now appeal to the international community to stand up for its principles and condemn this aggressive behaviour against us."
Why would the Russians want this conflict? According to an analysis in The Daily Telegraph of London, there are two possible reasons: Russian nationalist politics and the corruption of local Russian military officers.
There is no doubt how serious is the rift between the two countries since Mikhail Saakashvili, the westernizing president, was swept to power in the Rose Revolution of 2003.
Russia has deeply resented its loss of influence in the country of Stalin's birth and is determined to halt Mr Saakashvili's ambitions for Nato and EU membership.
Moscow showed its displeasure by banning exports of Georgian wine and mineral water, vital sectors of an economy still heavily dependent on Russia.
Tensions erupted last September after Georgia expelled four Russian officers it accused of espionage. The Kremlin's excessive reaction raised eyebrows around the world. Moscow withdrew its diplomats from Tbilisi, severed trade, transport and postal links and deported thousands of Georgians living in Russia.
With a fierce anti-Georgian campaign being waged in the Russian press, some commentators suggested that a group of Kremlin hardliners were intent on provoking a military confrontation to provide an excuse to change the constitution and allow Vladimir Putin to stay in power.
The president is due to step down next March after completing his second term.
Alexei Malashenko, an expert on the Caucasus at the Moscow Carnegie Centre, said it was possible that this faction had ordered the firing of a dummy missile in a bid to fuel the crisis.
But he and other analysts said it was more likely that the missile attack could have been carried out by local Russian army units without the knowledge of the Kremlin.
The location of the air strike was close to South Ossetia, another Moscow backed breakaway region. Georgia and Russia have been at loggerheads over the tiny region — which is about the size of Suffolk — for years.
Tbilisi has accused Moscow of arming the rebels and firefights between separatists and Georgian soldiers have increased since 2004.
There have been signs, however, that Russia is finally willing to negotiate a settlement. Moscow has opposed the West's backing for independence of Kosovo, arguing that Serbia's territorial integrity should be inviolable and has threatened to veto a UN resolution that backs Pristina's position.
As a result, the Kremlin has had to temper its support for Georgia's breakaway regions or risk being accused of hypocrisy. But for Russian military units stationed in South Ossetia as peacekeepers and their commanders across the border in southern Russia, a peace accord would be highly undesirable.
As it has descended into lawlessness, South Ossetia has become a haven for smugglers and counterfeiters. According to western diplomats, a significant proportion of the fake dollar bills in circulation on America's east coast were manufactured here.
According to analysts, those profiting the most are Russian officers — many of whom hold posts in the South Ossetian administration.
If Georgia had already realized its goal of becoming a NATO member, this attack could have obligated the rest of NATO to meet its joint defense obligations. The Russians -- whether their motives are national or local -- are playing a most dangerous game.