Canada is pulling out of a joint NORAD-Russian exercise to protest the Russia`s occupation of Georgia, Defence Minister Peter MacKay said Thursday.

"As a result of recent events in Georgia we have formally taken a decision not to do that, not to participate in an operation that was known as Vigilant Eagle, which would have involved Canadian, American and Russian forces," MacKay said.

"It would be clearly inappropriate under the circumstances based on Russia`s breach of territorial integrity in Georgia."

The U.S. made the same announcement earlier Thursday about the exercise scheduled to begin Aug. 20 and it is clearly an attempt by the two countries to bring some pressure to bear on the Soviets for their actions in Georgia.

MacKay said that he thinks Canada and the U.S. are sending an important message with that "based on that type of aggressive behaviour we will not participate in the exercise.

"I hope it is a message that says the world is noticing your actions."

MacKay made the announcement late Thursday outside of a Conservative pre-election style rally speech by Prime Minister Stephen Harper.

MacKay said the exercise would have taken place in northern waters at a future date and that NORAD, Canada and the U.S. were still working on the details.

"This would have been a historic level of co-operation militarily in my view," he added about the exercise.

"I don`t want to put a time frame on how far we have stepped back but clearly this is a freeze on this type of progress with Russia."

MacKay said Canada remains hopeful that a lasting peace between Russia and Georgia can be reached.

"We are looking for ways that lower the temperature on what was a very serious breach of sovereignty and territorial integrity in Georgia."

He also said Canada is prepared to assist in humanitarian efforts in Georgia, if asked, and we would do so with other allied countries.

The fighting between Russia and Georgia erupted last week after soldiers from Georgia moved into a region of South Ossetia prompting Moscow to attack and invade the former Soviet republic.