Russia ordered the military to plan war games to deal with potential spillover from a US-Iran conflict.

The Kremlin is signaling that it will use all its diplomatic influence to oppose war and, according to a leading Moscow newspaper, has ordered the military to prepare for any possible spillover from a conflict between Iran and the US into the sensitive post-Soviet Caucasus region.

Russia will block any further sanctions against Iran in the UN Security Council, a Foreign Ministry official said Tuesday, because it believes rising tensions could trigger a conflict that would destabilize the wider region. Last week Russian deputy prime minister and former ambassador to NATO Dmitry Rogozin warned that any Western attack on Iran would constitute "a direct threat to [Russian] national security."

The independent Moscow daily Nezavisimaya Gazeta reported Monday that this year's annual military exercises in Russia's south, Kavkaz 2012, will be much larger than usual and organized around the premise of a war that begins with an attack on Iran but spreads to neighboring Armenia and Azerbaijan, and draws Russia into a regional maelstrom. The newspaper said the war games, which are usually confined to Russian territory, might this year include maneuvers in the breakaway Georgian statelets of South Ossetia and Abkhazia, and perhaps also in Russian-allied Armenia.

RELATED: Q &A: What's with the war talk surrounding Iran?

"We believe that sanctions relative to Iran have lost their usefulness," Gennady Gatilov, Russia's deputy foreign minister, told a Moscow press conference Tuesday.  "We will oppose any new resolution [on UN sanctions against Iran]

"Russia would consider any use of force against the territory of Iran unacceptable. That would make the situation even more critical. 

Unfortunately, many [Western] government leaders are not restraining themselves and are speaking openly about a military strike against Iran," Mr. Gatilov added.

A harsh sanctions regime, signed into law by President Obama two weeks ago, would target Iran's ability to earn cash through oil exports by penalizing Western companies who clear payments through Iran's central bank. The European Union could enact its own sanctions against Iranian oil exports as early as next week.

Doesn't want nuclear weapons in Iran, but doesn't want war

Russian experts say that Moscow opposes Iran's alleged drive for atomic weapons, but may fear the consequences of a military strike aimed at curbing the country's nuclear program more.

"War in Iran could create a new situation in the wider Caucasus and the Caspian Basin, which would a very serious challenge to Russia," says Fyodor Lukyanov, editor of Russia in Global Affairs, a leading Moscow-based foreign policy journal. "There is a high degree of uncertainty about what would happen in neighboring regions. How would it affect the situation around Nagorno Karabakh, for instance?"

Armenia and Azerbaijan (see map here) fought a savage war in the 1990s over the tiny Armenian-populated enclave of Nagorno Karabakh, which ended with Armenia annexing the territory and some surrounding regions. Azerbaijan has never accepted that outcome, but its desire for revenge has been checked by intensive international diplomacy.

"The situation around Karabakh is stable now, but the status quo could be destroyed by an external shock, such as war in next-door Iran," says Mr. Lukyanov. "For Russia, this would pose an impossible dilemma. That's why upcoming military exercises will be designed to address various possible outcomes and find ways to deal with them. . .  Russia is absolutely not interested in war breaking out."

Secret benefits for Russia

But, he adds, Russia might also "secretly benefit" from any US attack on Iran as long as it didn't produce pro-Western regime change in that country. Prices for oil, Russia's main source of foreign exchange, would skyrocket, at least in the short term.

"The most likely outcome is that the US would become bogged down in another complicated, long-term conflict," Lukyanov says. "That means US attention would be less directed than ever on the post-Soviet region, and that would be good for Moscow."

The Russo-Georgian August 2008 war came just days after the Russian military completed its Kavkaz 2008 war games in the north Caucasus, a conflict that ended with Russia declaring South Ossetia and Abkhazia fully independent from Georgia. Tensions between Russia and NATO-friendly Georgia continue to this day, and might also be deeply complicated by any conflict that breaks out between the US and nearby Iran.

Mr. Rogozin, the Russian deputy prime minister,  when asked to clarify his earlier comment that war against Iran would create a threat to Russia's national security, told journalists Tuesday that "any ratcheting up of tensions on Iran can bring nothing useful, it would lead to a catastrophe in the region.... Russia is doing everything it can from the point of view of diplomacy to resolve the conflict," he added.