Russian President Dmitry Medvedev ordered a halt to military operations in Georgia on Tuesday, after five days of fighting and just before French President Nicolas Sarkozy was to hold peace talks in Moscow.
A Kremlin spokesman confirmed Russian news agency reports that Medvedev had issued instructions to the Defence Ministry to "stop the operation to force the Georgian authorities to peace".
The news came just before Sarkozy was due to meet Medvedev at the Kremlin to discuss an international peace plan to halt the fighting, which has rattled world oil markets and unnerved the West.
Russian Foreign Minister Sergei Lavrov said earlier Moscow could not agree to the plan if it included Georgian troops in a future peacekeeping force because they had attacked Russian colleagues during Tbilisi's push to recapture breakaway South Ossetia.
"We can hardly agree with this because it would assume the presence of people described as Georgian peacekeepers," he told a news conference. "They can no longer remain. They brought shame upon themselves as peacekeepers. They committed crimes."
In Georgia, Russian warplanes bombed the town of Gori on Tuesday, killing at least five people, a Reuters correspondent said. There were isolated skirmishes along the front line but no major offensives by either side overnight.
Close U.S. ally Georgia entered a conflict with Russia last week after launching an offensive to retake the pro-Russian region of South Ossetia, which broke away from Georgian rule in 1992. Moscow responded with a huge counter-offensive.
Separatists in the Black Sea region of Abkhazia, west of the main war theatre, launched a major push early Tuesday to drive Georgian forces out of the Kodori Gorge -- the only area of the province under Georgian control.
"The operation to liberate Kodori Gorge has started," Abkhazia's self-styled foreign minister Sergei Shamba said. "Our troops are making advances. We are hoping for success." Abkhazia insisted Russian troops were not involved.
Moscow's troops appeared to have largely stayed within the two separatist areas of South Ossetia and Abkhazia overnight, calming fears they might push deep into Georgia and threaten President Mikheil Saakashvili's government.
Reuters correspondents in the key road junction of Gori, on the main east-west highway across Georgia, said there were no Russian forces in the largely deserted town, though Moscow's warplanes were bombing artillery positions around the town.
Georgian government officials claimed on Monday evening that Moscow had seized Gori, cutting the country in half and that Russian troops were advancing on Tbilisi to overthrow Saakashvili's government.
President George W. Bush appeared to support that view, saying on Monday that "Russia has invaded a sovereign neighbouring state and threatens a democratic government elected by its people".
Asked about these comments, Lavrov said on Tuesday that Russia had no intention of overthrowing Saakashvili, though he encouraged him to resign because "he can no longer be our partner".
"It is not in our tradition to topple anyone or put someone on a throne," Lavrov told a news conference.
Strained Relations with West
Bush told Moscow to end its military action and accept a peace agreement, saying its moves had jeopardised relations with the United States and Europe.
Further calming fears of a major Russian military offensive inside Georgia, Moscow's troops pulled back from Senaki, a Georgian town east of Abkhazia which they had briefly occupied on Monday, saying their military objectives had been achieved.
Georgia hosts a key pipeline carrying oil from the Caspian to the West and the fighting has unsettled oil markets, though the pipeline itself has not been touched by the conflict.
The war has alarmed investors in Russia, hitting the rouble and Russian stocks and has raised fears of a wider conflagration in the volatile region bordering Iran, Turkey and Russia.
Moscow had on Monday snubbed Georgia's declaration of a ceasefire, saying Tbilisi was continuing to fight and must first sign a pledge never to use force against South Ossetia again.
Prime Minister Vladimir Putin, taking a leading role in the crisis, has accused Georgia of sparking the crisis and attacked the United States for backing Tbilisi.
Georgia called for a U.N. peacekeeping force to intervene to halt its conflict with Russia, and said on Monday evening its battered forces had retreated to defend the capital Tbilisi.
Saakashvili said Moscow should know Georgia will not quit. "Georgia will never surrender," he said on CNN. "They (Russians) should know Georgia will never surrender."
Saakashvili said earlier he had agreed to a plan proposed by French Foreign Minister Bernard Kouchner under which hostilities would end, a mixed peacekeeping force would be deployed -- replacing the purely Russian one -- and troops would return to pre-conflict positions.
Kouchner was in Georgian on Monday before flying to Moscow for meetings on Tuesday ahead of Sarkozy's arrival.
Russia says 1,600 South Ossetian civilians have been killed in the fighting and thousands are homeless and describes Georgia's actions in the province as a "genocide" but these figures have not been independently verified.
Georgia has reported close to 200 killed and hundreds of injured.