The sides discussed the possibility of building a Russian-funded highway that would link Vladikavkaz to the South Ossetian capital of Tskhinvali and skirt around the separatist republic's ethnic Georgian villages.
Topics also included the construction of a north-south gas pipeline, Moscow's participation in a planned Ossetian-language television channel, and possible ways to upgrade South Ossetia's banking system so residents can receive their Russian-paid pensions electronically.
But both sides also used the forum to make overtly political statements.
Addressing reporters on March 22, North Ossetian President Taimuraz Mamsurov said the ultimate goal of all those joint projects is to anticipate any possible Georgian economic sanctions against South Ossetia, which forcibly won de facto independence from Tbilisi in the early 1990s.
"To preempt any possible complications, we decided to take steps with a view to raising the living standards of South Ossetia's residents in accordance with those that already exist in North Ossetia, although here too a lot remains to be done so that all people have the life they deserve," Mamsurov said.
South Ossetian President Eduard Kokoity, who is likely to seek a second term later this year, went even farther.
"We plan to lodge a number of requests in the near future, including with the Russian Constitutional Court, because there is a 1774 document on the inclusion of Ossetia into the Russian empire," he said. "However, there is no document that says the southern part of Ossetia is no longer part of the Russian empire, or the Russian Federation."
Commenting on this statement the same day, Tskhinvali-based Ossetian Radio left no doubt as to whether Kokoity would use the purported legal loophole to reiterate his longtime demand that South Ossetia be incorporated one way or another into the Russian Federation.
"'Why should we raise the issue of our inclusion into Russia if we never left it?' said Kokoity," the radio station reported. "Ninety-five percent of South Ossetia's citizens are citizens of Russia and they have the right to appeal [to its] Constitutional Court."
Ossetians maintain they all became Russian subjects after the signing of the Kucuk Kaynarca treaty that put an end to the 1768-74 Russo-Turkish war and consecrated Moscow's advance into the Black Sea region and the Caucasus.
Georgians in turn counter that Ossetia as a territory did not exist at the time. They also say the 1774 treaty makes no mention of Ossetians willingly submitting to Russian rule and, therefore, cannot serve as a legal basis for reunification claims.
The Ossetian people remained undivided until the Bolsheviks established control over the Caucasus and gave their southernmost lands to what would become Soviet Georgia.
The United States, which has close ties with the current Georgian government, on March 23 condemned Kokoity's calls for the incorporation of his republic into Russia through its envoy to the Organization for Security and Cooperation in Europe, Julie Finley.
But Georgian Minister for Conflict Resolution Giorgi Khaindrava told RFE/RL that authorities in Tbilisi are not taking South Ossetia's reunification claims seriously.
"For us, there is only one Ossetia," he said. "It is the republic of [North Ossetia]-Alania that belongs to the Russian Federation. For us, there is no other Ossetia. There exists on Georgia's territory a region that is called the Tskhinvali region, where ethnic Ossetian Georgian citizens live. We live in the 21st century, not the 18th, and to turn to treaties signed in the 1770s or 1200s is just an excursion back into history. If we look into late empires, we could go back to the times of [sixth-century B.C. Babylonian monarch] Nebuchadnezzar, Rome, or Byzantium as well."
Ruled From Moscow
Adding fuel to the controversy, Russia's "Vedomosti" economic daily on March 23 cited inflammatory remarks allegedly made the day before in Vladikavkaz by a high-ranking Russian government official.
The newspaper quoted Gennady Bukayev, an aide to Russian Prime Minister Mikhail Fradkov, as telling the joint cabinet session that a decision to merge both Ossetias had already been made in Moscow and that the new territorial entity would be named Alania.
"Vedomosti" said it obtained the information from a local ITAR-TASS correspondent and that a presidential spokesman in Vladikavkaz confirmed that Bukayev did make such remarks, which North and South Ossetian cabinet ministers reportedly met "with enthusiasm." It also suggested Moscow would likely cite "the precedent of Kosovo" to justify its calls for Ossetia's reunification.
Russian President Vladimir Putin on January 31 hinted that if the international community agrees to grant Serbia's predominantly ethnic Albanian province full independence, it should then opt for a similar approach with regard to settling Georgia's separatist conflicts with South Ossetia and Abkhazia.
The Vedomosti" report apparently sparked confusion in Moscow. Foreign Ministry spokesman Mikhail Kamynin reiterated Moscow's official stance that it respects Georgia's territorial integrity and that the status of South Ossetia should be discussed "without precipitation" and only within the framework of ongoing Russian-Georgian-Ossetian peace talks. Kamynin also suggested that Bukayev was misquoted.
Other government officials quoted by various Russian media outlets were at even greater pains to explain Bukayev's purported remarks. One such official said he was "shocked." Another suggested Fradkov's aide was probably instructed to test the ground pending a more official statement after Kosovo's status is decided.
But even that, Khaindrava says, is inadmissible to Georgia. "If this is a trial balloon, it has no future and it will miss its target. It is just propaganda, sheer provocation, and a totally irresponsible step," he said. "It can smear Russia's image as a member of the international community and it can only embarrass its leaders."
The Georgian Foreign Ministry today said in a statement it had summoned Russian Ambassador Vladimir Chkhikvishvili to seek clarification on Bukayev's remarks, but that he provided none.
Meanwhile, the North Ossetian president said Ossetia's reunification was "inevitable." Only the timing and modalities of the process remain unclear, Mamsurov added in remarks to the Interfax-Yug news agency on March 23.