Russia forces on edge of S.Ossetia capital - website

Enlarge Photo A Russian military vehicle travels through North Ossetia, close to the city of Vladikavkaz, towards... Slideshow: Day in pictures: 8th August 2008

Fri, Aug 8 11:45 PM

By Margarita Antidze

MEGVREKISI, Georgia (Reuters) - Russian armoured vehicles have entered the northern edges of the capital of the breakaway Georgian region of South Ossetia, the separatists' press service reported on its website on Friday.

"Russian armoured vehicles have entered the northern suburbs of Tskhinvali," the website cominf.org reported, adding that Georgian troops had started to retreat.

Moscow said its troops were responding to a Georgian assault to re-take the region, and Georgia's pro-Western President Mikheil Saakashvili said the two countries were at war.

Russia would cut air links with the ex-Soviet state from midnight on Friday, the Russian Transport Ministry said.

Saakashvili told BBC World television Russia had been massing troops on the northern border of Georgia for months.

" They have been calling it training exercises, but they have not been concealing the fact that they are training these troops for use inside Georgia," he said.

"The way the escalation went was we came first under extensive artillery barrage from the separatists ... but in the end I was told that Russian armoured vehicles started to cross the Georgian border. And that was exactly the moment when I had to take this decision to fire back."

The head of Georgia's Security Council, Kakha Lomaia, said on Friday Georgia would withdraw 1,000 soldiers from Iraq to help fight off Russian forces in South Ossetia.

The upsurge in violence in Georgia caused Russian shares to plummet on Friday and helped send emerging stock markets to their lowest level in almost a year.

President George W. Bush, in Beijing for the opening of the Olympic Games, pledged U.S. support for Georgia's territorial integrity, the White House said.

"I want to reiterate on his behalf that the United States supports Georgia's territorial integrity and we call for an immediate ceasefire," White House spokeswoman Dana Perino said in a statement.

U.S. TO SEND ENVOY

NATO and the European Union joined calls for a halt to the fighting.

In Washington, State Department spokesman Gonzalo Gallegos said the United States was sending an envoy to the region "to engage with the parties in the conflict".

The president of South Ossetia, Eduard Kokoity, was quoted as saying about 1,400 people had been killed as a result of "Georgian aggression".

"About 1,400 died. We will check these figures, but the order of the numbers is around this. We have this on the basis of reports from relatives," he told Russia's Interfax news agency.

A senior Georgian security official said Russian planes had bombed a military base outside the Georgian capital Tbilisi. The Interior Ministry said later three Georgian soldiers were killed.

Political analysts saw Georgia's bid to re-take its rebel region of South Ossetia by force as a gamble by its leader that he could still count on Western support in a clash with Russia.

"He is in big danger of losing the cachet he built up for himself in being pro-Western and the restraint he has often shown in the face of provocation by Russia," said James Nixey, of the Royal Institute of International Affairs in London,.

"If he is going to start a war, he is going to lose the support of a lot of friends in the West."

Saakashvili, who wants to take his small Caucasus country into NATO, has made it a priority to win back control of South Ossetia and Abkhazia, another rebel region on the Black Sea.

The issue has bedevilled Georgia's relations with Russia, angered by Tbilisi's moves towards the Western fold and its pursuit of NATO membership.

EXPLODING SHELLS

The U.N. Security Council met at Georgia's request but failed to agree on a Russian-drafted statement. It planned to meet again later to continue discussions on the issue.

As fighting raged, the roar of warplanes and the explosion of heavy shells resounded more than three km (two miles) from Tskhinvali. Many houses were ablaze.

Georgian television showed footage of Georgian soldiers firing machineguns and driving armoured personnel carriers through the deserted streets of Tskhinvali.

Shell holes pierced the grey concrete apartment bocks and plumes of smoke hung over the South Ossetian capital.

In other footage, Georgian soldiers sprinted through undergrowth and dived for cover as a Russian plane dropped bombs.

Russian Foreign Minister Sergei Lavrov accused the Georgians of driving people from their homes. "We are receiving reports that a policy of ethnic cleansing was being conducted in villages in South Ossetia, the number of refugees is climbing, the panic is growing, people are trying to save their lives," he said in televised remarks from the ministry.

The crisis, the first to confront Russian President Dmitry Medvedev since he took office in May, has flared in a region emerging as a key energy transit route, and where Russia and the West are vying for influence.

It dented sentiment on Russia's benchmark equity index, which fell more than 4 percent to a 14-month low while the rouble lost more than 1 percent against a basket of currencies.

Fitch Ratings cut its foreign-currency sovereign credit rating for Georgia by one notch to "B+" from "BB-" on Friday.

Medvedev vowed to defend Russian "compatriots" in South Ossetia, where most people have been given Russian passports.

"We will not allow their deaths to go unpunished," Interfax quoted him as saying.

The majority of the roughly 70,000 people living in South Ossetia are ethnically distinct from Georgians. They say they were forcibly absorbed into Georgia under Soviet rule and now want to exercise their right to self-determination.

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