Like most Georgians, Ms. Zarkua was horrified at the magnitude of the terrorist attacks, but though she was shocked, she felt comforted by the fact the terror was thousands of kilometres away, on another continent.

A year later, she shakes her head in wonder at how rapidly the world has changed. The Pentagon is largely restored; the Taliban has been ousted from Afghanistan, and the war on terrorism has found itself an unlikely battleground in this tiny former republic of the Soviet Union.

"I was at home watching TV when I saw what had happened" last Sept. 11, the 48-year-old recalls, carefully watching her young grandson clamber up a set of stairs outside the State Chancellery in balmy downtown Tbilisi.

"I don't even want to remember it; it makes me scared for my children. But no, I never thought it would affect us."

It has. One year after the al-Qaeda terrorist network launched its assault on the United States, Georgia finds itself playing host to U.S. troops, combating terrorists on its own soil, and being called a terrorist haven by Russian President Vladimir Putin.

In an attempt to counter that image, "No to Terrorism" banners written in Georgian and English hang across downtown streets of this otherwise laid-back capital city.

The hunt for terrorists is focused on the notorious Pankisi Gorge on Georgia's border with Russia, a picturesque but lawless region. U.S. intelligence agencies believe dozens of al-Qaeda members may be hiding out there, taking advantage of the difficulties associated with policing the 20-kilometre-long forested crevice. Russia, meanwhile, says the gorge is serving as a base for another group it calls terrorists: Chechen rebels pushed south by the fighting in that breakaway Russian republic.

"Georgia as a country is very weak; they have no army, no control over their territories. That's why it is now a centre of international terrorism," said Yuri Anchabadze, deputy head of the Institute of Ethnology and Anthropology in Moscow, an expert on the Caucasus region.

While Georgia acknowledges fighting in Chechnya has pushed some armed militants into its territory, evidence of a Georgian link to al-Qaeda or other international terrorist organizations is incomplete at best. When Georgia caved in to Russian pressure recently and sent 1,000 troops in to sweep the Pankisi Gorge, they picked up just one suspicious foreign national, a Moroccan who police say was carrying a fake French passport.

There have also been sporadic news reports of a phone call intercepted by a U.S. intelligence source last Sept. 11 just 15 minutes after the attack on the World Trade Center.

The caller, apparently a known al-Qaeda operative in Afghanistan, joyously told an unknown party in Georgia of the success of the initial strike, and spoke of another target about to be hit. Georgia hotly denies this.

Russia, meanwhile, has been using such stories as ammunition to increase the pressure on Georgian President Eduard Shevardnadze to let Russian troops pursue Chechen rebels on the Georgian side of the border.

Several times in recent weeks, Russian warplanes have dropped bombs on Georgian territory.

The most recent strike killed one shepherd and injured several others. Many suspect Russia is only trying to bring its former satellite back into line. Mr. Shevardnadze snubbed Moscow earlier this year and invited U.S. forces into the country to train the Georgian army for antiterrorist operations.

Blaming Georgia for the continuing unrest in the Russian Caucasus, some say, also gives Mr. Putin, who faces an election in little more than a year, a way to explain why fighting continues in Chechnya several months after he declared the military campaign there to be over.

"Putin needs the Pankisi Gorge. He needs to be able to say that he has cleared Chechnya, and that Georgia is now the problem," Kakli Kenkadze, a foreign policy adviser to Mr. Shevardnadze, said in an interview yesterday.

Others, though, are making more dire predictions.

"The Kremlin apparently hopes to goad Washington into an Iraq-for-Georgia tradeoff," Vladimir Socor, a political analyst specializing in former Soviet republics, recently wrote in The Wall Street Journal. In chilled-out Tbilisi, such a future seems almost as unfathomable as the quarrel over the Pankisi Gorge did a year ago.

"One year ago I thought that because the terrorist attacks happened over there, it wouldn't affect us here," said Elgudja, a 52-year-old civil servant, as he chatted with neighbours on a shady sidewalk yesterday evening about the distant prospect of war.

"Now, who knows? It's just one big, scary movie."