In an emergency session Monday, European Union leaders threatened to postpone talks on a pact with Russia unless Russian troops pull back from positions in Georgia.
It gingerly considers how to set consequences for Russia and maintain cooperation.
Tuesday, after invoking Kosovo to recognize two separatist republics, Russia changed its tack.
Damascus is seeking an arms deal with Moscow, a move that would bolster its position in the Middle East.
Medvedev approved the move a day after parliament voted unanimously in favor of it.
In the coming weeks, the West will be shaping a long-term response to what many see as Prime Minister Vladimir Putin's bid to change the post-cold-war world.
Our correspondent describes a tour led by Kremlin press attaché Sasha Mechevsky through Russian-controlled villages and the South Ossetian capital of Tskhinvali.