Georgia appeals for help over Russia "invasion"

By Matt Robinson

TBILISI (Reuters) - Georgia appealed for international intervention on Monday and pulled its battered forces back to defend the capital, as Russian troops moved further into its territory, ignoring Western pleas to halt.

"The Georgian army is retreating to defend the capital. The Government is urgently seeking international intervention to prevent the fall of Georgia," a Georgian statement said.

Moscow snubbed a plea from the Group of Seven (G7) industrial powers for a ceasefire. It said Georgia had not kept a promise to halt fighting and was shelling the Russian-held region of South Ossetia where the conflict began last Thursday.

A Reuters witness saw Georgian helicopter gunships bombing targets near the South Ossetian capital Tskhinvali, sending dark smoke billowing into the air. A second reporter heard heavy artillery bombardments on the road north of the wrecked town.

The conflict has unsettled oil markets because Georgia hosts a key pipeline supplying the West. It has alarmed investors in Russia and has raised fears of a wider conflagration in the volatile region bordering Iran, Turkey and Russia.

French President Nicolas Sarkozy was due to visit Georgia and Moscow on Tuesday for a round of diplomacy on behalf of the European Union, though it was unclear what could be achieved.

Moscow appeared in no mood to compromise, opening a second front in the fighting by moving troops out of Abkhazia in the west and taking the Georgian town of Senaki, though Russian officials earlier said they did not intend to occupy territory beyond the two separatist areas of South Ossetia and Abkhazia.

A senior Georgian official later claimed that Russian troops had seized the Georgian town of Gori, some 40 km (25 miles) from South Ossetia. Moscow denied that report and a Reuters correspondent said no troops were visible in Gori's streets.

The correspondent said a column of Georgian military trucks was visible on the highway moving out of Gori eastwards towards the capital Tbilisi.

The simmering conflict erupted last Thursday when Georgia suddenly sent forces to retake South Ossetia, which threw off Georgian rule in the 1990s and declared itself independent, albeit without international recognition.

Moscow responded with a counter-attack by its vastly bigger forces that drove Georgian troops out of the devastated South Ossetian capital Tskhinvali on Sunday. Russia says 1,600 people have been killed in the fighting and thousands more are homeless but these figures are not independently verifiable.

Georgian President Mikheil Saakashvili said he had agreed to a plan proposed by French Foreign Minister Bernard Kouchner on Monday under which hostilities would end, a mixed peacekeeping force would be deployed and troops would return to pre-conflict positions.

Women and children wept in the streets of Tskhinvali on Monday as they surveyed the destruction amid continued Georgian shelling. Russian troops distributed water and food from trucks.

One elderly resident told Reuters how she sheltered in a cellar with her 7-year-old grandson during the bombardment.

"My grandson screamed: 'Uncle Putin please help us, help us so that the Georgians don't kill me !'. They were screaming and crying it was terrible, a nightmare," she said.

"Thank God the Russians have come. It is getting better."

Russian Prime Minister Vladimir Putin, who has taken a leading role in the crisis, attacked the United States for helping Georgia fly home troops from Iraq and said the West was mistaking the aggressors for victims in the conflict -- a reference to strong Western support for Georgia.

Putin mocked the support given by the West to Saakashvili, comparing him to former Iraqi leader Saddam Hussein, who was hanged in 2006 for executing Shiites.

"They (the Americans) of course had to hang Saddam Hussein for destroying several Shiite villages," Putin said.

"But the current Georgian rulers who in one hour simply wiped 10 Ossetian villages from the face of the earth, the Georgian rulers which used tanks to run over children and the elderly, which threw civilians into cellars and burnt them -- they (Georgian leaders) are players that have to be protected."

Russia said at a daily military briefing that it had lost four military aircraft and 18 soldiers since the fighting started, with another 14 missing in action and 52 wounded.

Russian financial markets slid to their lowest levels in two years early Monday as investors panicked over the conflict.

Russian stocks later reversed some of their losses on suggestions by President Dmitry Medvedev that the war may be nearing an end and the benchmark RTS index closed at 1,743 points at 3:50 p.m. British time, up 1.2 percent on the day.

Oil prices rose again on Monday after a recent retreat from record levels, with crude topping $116 a barrel.

A Georgian government source said on Sunday 130 Georgian civilians and military personnel had been killed and 1,165 wounded, many because of Russian bombing inside Georgia. Russia denies hitting civilian targets.