Georgian forces have entered South Ossetia and as a result Russian planes have bombed Georgian military targets and a 15-day state of war has been declared by Georgia. South Ossetia declared itself an independent republic in the 1990's after the Georgian-Ossetian War. However, the independence was never recognised by any UN members. It's technically still a Georgian region but since the war it's been guarded under international agreement by Russian 'peacekeepers'. Georgia has never had good relations with Russia - it has close links with the US and it recently wanted to join NATO.
Many South Ossetians want independence from Georgia. The South Ossetian administration held a referendum in 2006 which they say showed 99% support for independence and 95% turnout. Many South Ossetians also hold Russian passports, so Russia says it has a responsibility in the region.
US President Bush has called for Georgia's territorial integrity to be respected. Bush really doesn't want this war - partly because Georgia has urgently pulled its 2000 troops out of Iraq so they can be re-deployed in South Ossetia.
The Russian Ambassador to Georgia has said 2000 civilians and 13 Russian 'peacekeepers' have been killed. He told the media: "The city of Tskhinvali no longer exists. It is gone. The Georgian military has destroyed it."