In a hard-hitting speech in Washington, Dr Rice said Russia's leaders went too far when they ordered the August 7 invasion of neighbouring Georgia and they now face what she said is a united US-European diplomatic defense of Tbilisi.
The attack "has crystallised the course that Russia's leaders are taking - and brought us to a critical moment for Russia and the world," Dr Rice told the German Marshall Fund, a transatlantic policy research group.
The United States and its European allies, she continued, are "acting as one in supporting Georgia," which accuses Russia of seeking to annex the breakaway Georgian areas of South Ossetia and Abkhazia.
"Russia's bid to join the World Trade Organization (WTO) is now in question. And so too is its attempt to join the Organization for Economic Cooperation and Development," she said.
"What has become clear is that the legitimate goal of rebuilding Russia has taken a dark turn," she said.
In Russia, there is now a "rollback" of personal freedoms, "arbitrary enforcement of the law," and widespread corruption, as well as the "paranoid, aggressive impulse which has manifested itself before in Russian history."
President Dmitry Medvedev, meanwhile, has used a meeting with foreign diplomats to criticise countries that supported Georgia during the war over the breakaway regions of South Ossetia and Abkhazia.
Moscow correspondent Scott Bevan reports that President Medvedev received credentials from 12 ambassadors, including Australia's new representative in Russia, Margaret Twomey and a US representative.
Mr Medvedev took the opportunity to talk about his country's recent conflict with Georgia.
In criticising Georgia's actions in its breakaway regions, he said military adventurers sponsored from outside can call into question the rights of whole nations.
Russia's relations with the United States have been further strained by the conflict, but Mr Medvedev has said those relations shouldn't be squandered.
Rethink on Australian uranium
The Australian Federal Opposition says Russia's actions against Georgia could be a legitimate reason for Australia to delay exporting uranium to Russia.
A Parliamentary Committee has recommended an agreement signed last year not be ratified until Russia meets certain conditions.
Opposition foreign affairs spokesman Andrew Robb says Russia has already met its international obligations.
But he says he accepts that the Prime Minister wants to consider the conflict in Georgia before making a decision.
"It is an act which needs to be strongly condemned and we've done so and the government's done so," Mr Robb said.
"Whether it means that we don't proceed with this agreement is a matter for the government to make some judgment on and then explain that decision to the community".