Zhvania was found dead early Thursday in a friend's apartment in Tbilisi, the former Soviet republic's Interior Ministry said. He had apparently died of carbon monoxide poisoning - the result of a poorly-installed natural gas-powered heater.
The deaths of both the prime minister and his friend, who was deputy governor of one of Georgia's regions, are investigation, and Georgian media reports said FBI experts may be called in.
The Interior Ministry said there was no reason to suspect foul play, although one Georgian lawmaker voiced suspicion that "outside forces" -- a reference to Russia -- may be involved.
State Department spokesman Adam Ereli said in a statement of condolence that Zhvania "was a catalyst for democratic change in Georgia, a dynamic leader and a friend."
In his response, Saakashvili said Georgia had lost a "great patriot" while he personally had lost his closest friend, most reliable advisor and greatest ally.
He assured the country that the government had the political situation under control.
"We are a strong state, we are strong nation and we will manage to settle the problems," added the president, who has seven days to nominate a new prime minister.
Saakashvili now faces new challenges as he grapples with Georgia's separatist woes.
Zhvania was a key figure in government efforts to negotiate settlements with the separatist-minded Abkhazia and South Ossetia regions.
Regarded as more moderate than the staunchly nationalist president, he had stated that Georgia's territorial problems would never be resolved without the participation of Russia. Moscow supports the separatists, who want Abkhazia and South Ossetia to become part of Russia.
Zhvania, 41, was lawmaker since 1992, rising to speaker of parliament in 1995, and initially a supporter of then-president Eduard Shevardnadze.
Subsequently he became one of the leaders, with Saakashvili, of the "Rose Revolution" mass protests in December 2003 that resulted in the departure of Shevardnadze. Saakashvili appointed Zhvania prime minister in February 2004.
The president of the self-proclaimed "republic" of Abkhazia, Sergei Bagapsh, warned that Zhvania's death could lead to new tensions between Georgia and Abkhazia.
In Moscow, President Vladimir Putin offered his condolences, praising Zhvania as a champion of the development of friendly relations between the Russia and Georgia.
Putin's foreign minister, Sergei Lavrov, strongly denied Georgian lawmaker Alexander Shalamberidze's claims that Russia was behind the deaths.
Such politically motivated claims would not help to establish the truth and would not advance Russian-Georgian relations, Lavrov said.
Shalamberidze alleged that both the death of the prime minister and a car bombing that killed three policemen near in a city near the South Ossetia border on Tuesday were connected and the work of "certain forces operating in Russia."
Analysts point out that several elements could have had an interest in Zhvania's death, including politicians or criminal gangs angered by his anti-corruption drive; "hardliners" who wanted Georgia to take armed action against the separatists; and Chechen terrorists hoping to provoke a Georgia-South Ossetia war that would drag in Russia and divert Moscow's attention away from Chechnya.
Recently, Senators John McCain (R-Ariz.) and Hillary Rodham Clinton (D-N.Y.) nominated Saakashvili and his Ukrainian counterpart, Viktor Yushchenko, for the Nobel peace prize for "leading freedom movements in their respective countries."
The two pro-Western leaders' victories in elections in the two strategically-located countries came as a blow to the Kremlin, which regards Georgia and Ukraine as part of its sphere of influence.
(CNSNews International Editor Patrick Goodenough contributed to this report.)
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