The exercise, dubbed Caucasus 2008, involves units of the North Caucasus Military District, mainly the 58th Army, the 4th Air Force Army, Interior Ministry troops, and border guards.
"The personnel, equipment and ammunition are being unloaded at the town of Mozdok" in North Ossetia, a spokesperson for Russia's Ground Forces said Wednesday.
The paratroopers will make a forced march to the assigned zone of operation in the mountains, where they will conduct a series of tactical exercises, including live-fire drills.
The Pskov paratroopers will be later joined by units from an air assault regiment based in the Volga region, which will be transported to the Krasnodar Territory by rail and conduct a forced march to the exercise zone.
The exercise is taking place on the territory of Chechnya, North Ossetia, Ingushetia, Kabardino-Balkaria, and Karachayevo-Circassia.
Lt. Col. Andrei Bobrun, an aide to the commander of the North Caucasus Military District, earlier said the exercise involves some 8,000 military personnel, about 700 combat vehicles and more than 30 aircraft.
The main goal of the exercise, according to the Russian military, is to work on interoperability between federal troops, Interior Ministry troops, border guards, and the Air Force in special operations against militants and in the defense of Russia's state borders, and to practice support of Russian peacekeepers in Georgia's breakaway regions of Abkhazia and South Ossetia.
Georgia protested Wednesday against the Russian military exercise near its borders, saying it was another manifestation of aggression against Tbilisi.
Georgia's parliament approved Tuesday a presidential initiative to increase the armed forces by 5,000 personnel to 37,000 amid growing tensions with Russia over two breakaway provinces.
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The clash of Russian and Western interests has given rise to a geopolitical battle. German politicians are trying to leave all doors and windows open for dialogue with Russia. Moscow does acknowledge this, and Germany is probably the only country with which it is ready to discuss European security.