Tensions between Iran and the West have spread to the Caucasus, where a bomb was found attached to an Israeli diplomatic car last week.
Iran and Israel appear to be engaged in a covert war of threats, bomb attacks and assassination plots in the Caucasus, a region that was firmly inside Russia's sphere of influence in the Cold War.
Iran's secretive nuclear programme is a target for spies, as Western leaders remain convinced that Tehran is trying to develop nuclear weapons, despite its denials.
The anti-Israeli bomb plot in the Georgian capital Tbilisi came just three weeks after authorities in neighbouring oil-rich Azerbaijan had arrested three men accused of plotting to assassinate the Israeli ambassador in Baku.
According to the Azeri authorities, a Jewish school and local rabbis were also targeted.
Israel's government accused Iran of being behind the attacks - a charge Tehran denied.
Last week Iran snarled back at Azerbaijan, which has friendly ties with Israel. Tehran said the killers of an Iranian nuclear scientist, who was assassinated in January, had been allowed to escape through Azerbaijan.
These tensions suggest that Iranian spies and agents of Israel's secret service Mossad are active in the southern Caucasus, made up of Georgia, Azerbaijan and Armenia.
The development of Azeri oil and gas in the Caspian Sea, with major export pipelines pumping energy to Western markets, heightens the region's strategic importance.
When it comes to spying, this region is like Switzerland before World War II, says Georgian political analyst Alexander Rondeli. "Everyone is using the South Caucasus for this hidden war. No doubt about it," he said.
Squeezed between Russia, Iran and Turkey, the southern Caucasus is a strategic crossroads between Iran and the West.
Azerbaijan, bordering on Iran, has historical and cultural ties with Tehran as an estimated 20 to 30 million people in northern Iran are ethnically Azeri.
Georgia, which introduced visa-free travel with Iran last year, is enthusiastically attracting Iranian trade and tourism to boost a flagging economy. Thanks to the new visa regime, an unprecedented 60,000 Iranian tourists visited Georgia last year.
But at the same time, Georgia and Azerbaijan are keen Western allies. Both contribute to Nato's mission in Afghanistan and have strong business links with Europe.
Georgia's main foreign policy objective is to join Nato and the EU.
Azerbaijan is a big supplier of oil and gas to the West, including Israel. In return, Azerbaijan buys Israeli weapons and military equipment.
Torn loyalties are nothing new in the southern Caucasus.
For centuries the Russian, Persian and Ottoman empires fought over this beautiful region of mountains higher than the Alps and fertile valleys, home to the world's first known vineyards.
Having Russia to the north and Iran to the south makes this a tough neighbourhood - and it is getting tougher all the time.
"This is now the most complicated period of the last 200 years," says Arastun Orujlu, a former Azeri counter-intelligence officer and now a political analyst in Baku.
Challenge to Russia
Until 1991 Georgia, Azerbaijan and Armenia were all part of the Soviet Union, making Russia the only game in town.
But today, Turkey and Iran, both former imperial powers in the region, are regaining their pre-19th Century self-confidence.
This region suddenly finds itself back in the position of being surrounded by three increasingly assertive powers. "You can't choose your neighbours" - that is a refrain often heard in these parts.
But you can choose your allies - and Azerbaijan has opened up to Turkey and the US, as well as its old master Russia, since the Cold War ended.
It is a major stopover point for US troops, supplies and fuel en route to Afghanistan.
And in 2007 the then Russian President Vladimir Putin surprised Western leaders by offering to let America use the Russian radar station at Qabala in Azerbaijan to defend Europe against any missile attack from Iran.
At the time the deal stalled as the Bush administration did not want to give up its own anti-ballistic missile system in Eastern Europe.
But President Barack Obama's more conciliatory approach to Moscow and the anxiety about Iran means the proposal could be back on the table.
Instability in Georgia
Russia and the US did work together in Georgia after the 11 September 2001 terror attacks on the US.
There were fears that the mountains of northern Georgia, bordering on war-torn Chechnya, were harbouring terrorists linked to al-Qaeda.
To pre-empt any Russian intervention in Georgia the US stepped in, providing Georgian troops with training and intelligence to help police the region.
So what would be the consequences of any US or Israeli strike against Iran?
"Georgia would be the nearest target for an Iranian counter-strike," believes Arastun Orujlu. "Azerbaijan would try to avoid any co-operation with the West. But Georgia would co-operate with great pleasure."
Although Georgia's pro-Western government is an enthusiastic American ally, Alexander Rondeli disagrees. "We don't have any American bases here or the necessary military infrastructure." And diplomats say Washington would not put Georgia in such a vulnerable position.
Mr Rondeli believes the main danger for Georgia would come from Russia.
The two countries fought a war in 2008, and today Russian troops are still stationed in 20% of Georgian territory.
Some Georgians are worried that Moscow would use a conflict with Iran as a pretext to re-establish the Russian presence in the region, traditionally seen by the Kremlin as its own backyard and a useful barrier north of the volatile Middle East.
Georgian fears are being fuelled by Russia's plans to stage major military exercises in the Caucasus later this year.
Any major conflict with Iran could bring a humanitarian disaster, with hundreds of thousands of refugees flooding over the Iranian border into Azerbaijan - a country already struggling to cope with almost a million displaced people from the years of war with Armenia in the 1990s.
Analysts do agree on one thing: there is no appetite at local level for any more conflict.
The recent attempted terror attacks appear to be part of a war of nerves. But in this region, struggling to recover from years of war, people crave stability.