Georgia and Russia agree on truce

French President Nicolas Sarkozy has agreed an outline plan with Russia and Georgia to try to resolve their crisis.

A key element calls for all forces to return to the areas where they were before fighting broke out last week.

Georgian President Mikhail Saakashvili suggested some details were unacceptable and the French mediator admitted difficulties lay ahead.

Earlier, Russia announced its military activity in the area was completed and witnesses saw troops pulling out.

The BBC's Gabriel Gatehouse in Georgia says fighting in the South Ossetia region does now seem to have ended.

But despite the diplomacy and apparent withdrawal, rhetoric on both sides remained fiery and analysts were predicting a long road to peace.

Fighting flared last Thursday night when Georgia sent its army to regain control of South Ossetia - a region nominally part of Georgia, but with de facto independence and where a majority of people hold Russian passports.

Russia moved in forcefully, sending troops into South Ossetia and Abkhazia, another breakaway province. Georgian towns away from the two regions were also bombed.

Some 100,000 people are estimated to have been displaced by the conflict, which has created huge tensions in international relations.

The US says it is cancelling an annual joint naval exercise with Russia, scheduled for the end of this week in the Sea of Japan.

"In the wake of this conflict, there is no way that we can proceed with this joint exercise at this time," a US official told news agencies.

US Secretary of State Condoleezza Rice warned that Russia was "frankly... doing great damage" to its prospects for integrating into international organisations.

In a reference to the Soviet Union's invasion of Czechoslovakia, she said Moscow's behaviour belonged to "another time".

"We are not in 1968 and the message has been very clear to Russia that it cannot operate that way," she told the US channel ABC News.

EU meeting

Mr Sarkozy, in his current role as EU president, held talks with Russian President Dmitry Medvedev in Moscow for most of Tuesday before flying to Tbilisi.

He held news conferences with both Mr Medvedev and Mr Saakashvili - with all three leaders saying they had agreed in principle to a five-point plan.

A sixth point in the plan, about holding international discussions on the future status of South Ossetia and Abkhazia, was deleted with the agreement of President Medvedev, Mr Sarkozy and Mr Saakashvili said.

"The territorial integrity and belonging of South Ossetia and Abkhazia to Georgia can never be put under doubt," the Georgian leader said.

Mr Sarkozy said the document would be looked over by EU foreign ministers in Brussels on Wednesday before being submitted to the UN Security Council.


'Heartless destruction'

Earlier, Mr Medvedev called Georgian troops "thugs [Russian: otmorozki]" driven by a blood lust, and accused President Mikhail Saakashvili of lying over a previous ceasefire agreement.

And tens of thousands of Georgians gathered in Tbilisi's main square to hear Mr Saakashvili claim that Russia was continuing its "ruthless, heartless destruction" of Georgian citizens.

Neither side's claims could be verified.

Many issues remain that are likely to hamper peace negotiations.

Separatist rebels are continuing to fight Georgian troops in the Kodori Gorge region of Abkhazia - the only area of Abkhazia still under Georgian military control.

Georgia has meanwhile filed several complaints with international bodies over Russia's actions - including one at the International Court of Justice alleging ethnic cleansing.

Mr Saakashvili told crowds in Tbilisi that Russian peacekeepers in Abkhazia would now be regarded as an occupying army - ending an agreement in place since 1994.

And he also said Georgia would leave the Commonwealth of Independent States (CIS) - a Moscow-dominated group that includes most of the former Soviet republics.