President Dmitry Medvedev says Russia has formally recognised the independence of the breakaway Georgian regions of South Ossetia and Abkhazia.
The move follows a vote in both houses of parliament on Monday, calling on him to recognise the regions' independence.
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Russia and Georgia fought a brief war this month over the provinces which already had de facto independence.
Analysts say the move is likely to further escalate tensions between Russia and the West.
Rift with Nato
"I have signed decrees on the recognition by the Russian Federation of the independence of South Ossetia and the independence of Abkhazia," Mr Medvedev said in the announcement.
The US state department had said recognition of the two provinces' independence would be "a violation of Georgian territorial integrity" and "inconsistent with international law".
In a statement, Mr Bush called on Russia's leadership to "meet its commitments and not recognise these separatist regions".
Earlier on Tuesday, Russia cancelled a visit by Nato's secretary general, one of a series of measures to suspend co-operation with the military alliance.
Russia's ambassador to Nato said the trip would be delayed until relations between the two were clarified.
Dmitry Rogozin said a "new understanding" needed to be reached between Russia and Nato.
(BBC)
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