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Observers from India, Pakistan and Iran - all of which have official observer status with the organization - were present. Mongolia, a staunch supporter of the US, also has official observer status, but for reasons that are not given, there are no Mongolian observers present.
"One of the exercises involves Russian and Tajik special forces countering a simulated terrorist attack from Afghanistan." Another exercise involved para-drops. This is no small-scale war game. Nevertheless, do you think Dmitry Medvedev is going to suddenly decide to drop his complaint about NATO exercises in Georgia? Of course not.
The photo is from Peace Mission 2007, the previous SCO war game. According to official Chinese sources, "air forces and precision-guided weapons" were used at this "anti-terrorism military drill." Mmm hmm...