Moscow recalled its ambassador, most of its diplomats and their families from the Georgian capital last week, which prompted speculation about its further course of action. President Vladimir Putin and security chiefs met Sunday to discuss the issue.
And the Transportation Ministry announced Monday it was suspending transportation links with the South Caucasus country, which could hit its economy hard given that many Georgians come to work in the Russian capital and send money home to relatives.
"We have suspended air, railways, road, sea and bus transportation to Georgia," the Transportation Ministry said, though it failed to specify how long the measure would stay in place.
The Information Technologies Ministry likewise said that mail links had also been temporarily stopped.
Earlier Monday, Vyacheslav Volodin, a deputy speaker of Russia's lower house of parliament, said more than 300,000 Georgians worked in Russia.
"The Russian capital gives them the opportunity to work and resolve their living problems," he said. "And this is despite only 0.7% of them having the official registration documents required to work in Russia."
Volodin added that the Georgian diaspora in Russia transferred huge amounts of money from Russia to support their families living in Georgia. The Central Bank of Russia said last week that money transfers from Russia to Georgia made up 4% of Georgia's GDP.
Although Tbilisi pledged Monday to release the four servicemen to representatives of the Organization for Security and Cooperation in Europe, Russia's railroad monopoly Russian Railways said its board had advised the company to stop buying spare parts for electric locomotives in Georgia.
"The board of directors made the decision to recommend the company management to stop buying spare parts for locomotives in Georgia," said Vladimir Yakunin, the president of Russian Railways.
In March, Russian authorities banned Georgian wine and mineral water, Georgia's main export products, citing health safety concerns. President of the Georgian National Bank Roman Gotsiridze has said that the ban could slow the country's GDP growth by 0.5-1%.
Despite impressive recent economic performance recognized by international organizations, Georgia remains one of the poorest republics of the former Soviet Union - the WB put the 2005 poverty headcount ratio at $2 a day (PPP) at 25% of the population - and is heavily reliant on agriculture. Industry accounts for only one fifth of the GDP. Its budget deficit, expected to be $155 million this year, is mostly covered by loans from international financial organizations.
Relations between Georgia and Russia soured dramatically after the pro-Western government and President Mikheil Saakashvili came to power in the former Soviet republic in 2004 and began pursuing accession to the European Union and NATO.
Georgia has since been seeking to replace Russian peacekeepers with an international contingent in two conflict zones with breakaway regions, accusing Russia of trying to establish control there.
Russian officers in Georgia have been attacked and arrested several times but later released.