THE AEGEAN: A dispute between Greece and Turkey over which country has sovereignty over a tiny islet in the Aegean Sea has prompted the countries to mobilize their naval forces in a tense standoff that, if it escalates, could jeopardize their NATO alliance. "It is a serious situation any time you have two countries pointing guns at one another," reports TIME's James Wilde from Istanbul. "The Turks want to talk about it, but the Greeks are saying there is nothing to talk about. There could be oil deposits on the bottom of the sea, and that is why Greece isn't budging on the matter. From NATO's standpoint, it is critical to keep the alliance together, so I expect the U.S. or another power to step in to broker a deal." The islet, called Imia by Greeks and Kardak by Turks, is an unpopulated 10-acre dot in the eastern Aegean that is only about 7 kilometers from Turkey. For each side, that couldn't matter less: Greece and Turkey nearly went to war in 1987 over Aegean seabed mineral rights, and this time, rhetoric from both governments and heated news reports have quickly staked national honor on the outcome.