TBILISI (Reuters) - NATO began military exercises in Georgia on Wednesday in a move Russia said threatened stability in the region just nine months after a war between the former Soviet neighbors.

A brief, bloodless mutiny at a tank base near Tbilisi on Tuesday cast a shadow over the start of the month-long exercises. Georgia accused Russia of involvement, a charge Moscow dismissed as “insane.”

More than 1,000 soldiers from NATO countries, including the United States, will run through a simulated crisis response operation and peacekeeping exercises at a Georgian military base formerly used by the Russian air force.

Canadian soldiers were seen setting up command headquarters before field exercises get under way next week.

Russia has criticized the NATO exercises on its southern flank as “muscle-flexing” and says they could further undermine ties with the alliance.

Russia’s envoy to NATO, Dmitry Rogozin, said on Tuesday the alliance would be better off holding the maneuvers “in a madhouse” than in a country where troops were “rioting against their own president.”

Georgian President Mikheil Saakashvili’s domestic opponents have paralyzed Tbilisi with weeks of protests demanding he resign over his record on democracy and last year’s war. They questioned the Georgian government’s explanation for the mutiny.

“There are many versions of what really happened, but the one offered by the authorities is the least credible,” said Tina Khidasheli of the opposition Republican Party.

The war games, a year in the planning, have heightened tension between Russia and NATO, just as the two sides resumed formal contacts suspended after Moscow’s war with Georgia.

Russia crushed a Georgian military attempt to retake the pro-Moscow separatist region of South Ossetia last August, routing Tbilisi’s army and drawing condemnation from the West.

DIPLOMATS EXPELLED

NATO said this month’s exercises should not be misused.

“Georgia is just hosting the exercise and nobody should interpret the exercise in a different way and use it for other purposes,” a NATO spokeswoman said.

Chairman of the NATO Military Committee Admiral Giampaolo Di Paola is seen at the start of a NATO Chiefs of Defence meeting at the Alliance headquarters in Brussels May 6, 2009. REUTERS/Francois Lenoir

Further souring the mood, Russia announced the expulsion of two Canadian staff at NATO’s information center in Moscow on Wednesday -- a response to the Western military alliance’s decision to throw two Russian diplomats out of Brussels last week over a spying scandal.

NATO said the expulsions were counterproductive at a time when the sides were working to improve dialogue and Canada summoned the Russian ambassador to provide an explanation.

“Canada strongly regrets Russia’s decision to expel two Canadians serving at the NATO Information Office in Moscow,” said Catherine Loubier, spokeswoman for Canadian Foreign Minister Lawrence Cannon.

Foreign Minister Sergei Lavrov said Russia wanted normal ties with NATO and that he would raise the situation in Georgia with U.S. Secretary of State Hillary Clinton during a visit to Washington later this week.

“Of course we will discuss the alarming situation which continues in the South Caucasus, above all due to the provocative actions of the Georgian leadership,” Lavrov told reporters in Moscow.

Georgia’s government said the mutiny at a tank base east of Tbilisi was part of a Russian attempt to disrupt the NATO exercises and foment a wider rebellion against Saakashvili.

Russia said Saakashvili was trying to shift the blame for weeks of protests, which opposition leaders are threatening to broaden to the main east-west highway.

Military experts in Tbilisi suggested the tank battalion might have fallen victim of a tussle between the government and the opposition for the upperhand.

“Georgia is a state facing great challenges,” Saakashvili told a televised meeting with armed forces commanders. “It is a state...where we are able to confront destabilization and where no one should have any illusions it can be overthrown.”

Saakashvili said police had arrested a former Georgian diplomat and military expert who had worked at Georgia’s office within NATO, on charges of passing military secrets to Russia.

The NATO exercises are being held a few kilometers from the Mukhrovani ‘rebel’ tank base. “The multi-national training will go ahead in the planned timeframe,” Georgian Colonel Nugzar Tsintsadze said. “There was no threat.”

NATO, which invited many non-member countries to take part as well, insists the exercises pose no threat to Russia. They are seen as a gesture of solidarity with Georgia, whose NATO membership ambitions have been put on hold since the August war.