SECURITY, political and economic analysts are split over whether the military stand-off between Ukraine and Russia could escalate into conflict.
Michael Denison, a Russia expert at Chatham House, said: "I think all sides will know where to draw a line to prevent further escalation.
"Clearly it could escalate if there are flashpoints; if, for example, there is a stand-off between Ukrainian
and Russian naval forces or if US forces are impeded, obstructed or fired upon while undertaking humanitarian work. Those are areas where there could potentially be a flashpoint.
"It's in nobody's interest for this to escalate to a regional conflict.
"What happened in Georgia could directly impact on Ukraine if, for example, the political divisions in Ukraine solidify and become violent in any way. What this could do is set a template for Russian intervention in a sovereign state."
Geoff Smith, a strategist at Renaissance Capital, said: "A conflict is in neither Russia nor Ukraine's interest. Trade between the two has been rising at 30 per cent a year. The price moves today are understandable, but not really justified.
"Unfortunately, the gas deal with the Russians has not yet been signed and this could make it more difficult.
"A sudden adjustment to market prices for gas next year would be hard for the economy to absorb."
Luis Costa, a Commerzbank Debt strategist, said: "It's a perfect storm for Ukraine at the moment. The government has made it clear that it is on a collision course with Russia and there are other issues as well."
Neil Shearing, an emerging Europe economist at Capital Economics, said: "The idea that you get one of these flare-ups in tensions that involve military conflict that would then just die down overnight was somewhat misplaced. All you can really say is that we'll have a kind of focus on the more medium-term issues and try to see through this bout of political risk.
"It's certainly true that the longer this goes on, the bigger hit Russia's image is going to take in the West. But at the same time, there is a change of administration in Washington at the end of the year, and there has been a change in Moscow.
"Although Putin's prime minister, whether you like it or not, we do have a more dovish president in place now, whether he's pulling the strings or not."
Cliff Kupchan, the director of Europe and Eurasia at Eurasia Group, said: "A significant uptick in fighting is, on balance, unlikely, given President Medvedev's 12 August statement that hostilities are almost complete and the 13 August informal ceasefire.
"The chance of an incident is very low, as the risk to both sides is obviously extremely high. But some danger is created by ambiguity in the terms of the 'ceasefire' and by the chance that a separatist could try to trigger an incident."
