The conflict over the tiny separatist province of South Ossetia has spooked markets and rattled the West. It began when Georgia tried to retake the pro-Russian region last week, provoking a massive counter-offensive from Moscow.

Using language redolent of his mentor Vladimir Putin, Mr. Medvedev criticised Georgian President Mikheil Saakashvili on Tuesday as a "lunatic". Mr. Saakashvili had promised voters he would win back South Ossetia and a second separatist area, Abkhazia.

"You know, lunatics' difference from other people is that when they smell blood it is very difficult to stop them. So you have to use surgery," Mr. Medvedev told a news conference.

Georgians saw it differently, with a huge crowd outside the parliament building in Tbilisi hailing Mr. Saakashvili as a hero for defending his country against aggression from Moscow.

Speakers denounced Russia as the crowd chanted: "Georgia, Georgia!". Posters held up by demonstrators showed a photograph of Mr. Putin with the caption: "Wanted: Crimes against humanity in the world."

Mr. Saakashvili then appeared to cheers and pledged that one day Georgia would beat Russia. "I promise you today, that I'll remind them of everything they have done and one day we will win," he said.

In the conflict zone, a series of sudden, unexpected explosions on Tuesday in the town of Gori, about 70 kilometres west of Tbilisi, killed at least five civilians, a Reuters correspondent said.

Television footage and pictures suggested the blasts were caused by mortars, although it was not clear who fired. Russian forces were reported to be around 12 kilometres away at the time and denied attacking the town, which is the birthplace of Soviet leader Josef Stalin.

A Reuters witness said blasts shook the street in quick succession, gouging craters in the street and sending shrapnel flying through the air.

Broadcaster RTL later said a Dutch cameraman was among the dead and a correspondent was wounded.

Further north in the separatist capital of Tskhinvali, houses were still burning on Tuesday, surrounded by orchards and chestnut groves, after the battles of the last week.

Russian tanks and armoured personnel carriers patrolled the almost deserted streets.

Teimuraz Pliyev, 62, said he had spent three days hiding in a basement with his wife and children.

"It looks like a small Stalingrad, doesn't it?" he told reporters. "Barbarians! Look: this is Georgian democracy! If it weren't for Russia, we would have already been buried here."

A Russian army colonel, who declined to be identified, said: "There's still some occasional sniper fire, but we are finishing them off steadily and surely."

Despite Tuesday's diplomatic progress, there are still many issues separating the two sides before any final deal is struck.

Mr. Medvedev said the joint text he had agreed with Mr. Sarkozy laid down six conditions for a lasting settlement of the conflict.

"First, (parties to the conflict) must not resort to force. Second, they absolutely stop any military action. Third, there must be free access to humanitarian aid. Fourth, the Georgian armed forces need to be returned to their permanent bases. Fifth, the Russian armed forces will be moved back to their positions before the military action. Sixth, the beginning of international discussion of South Ossetia's and Abkhazia's future status," he said.

It was not immediately clear whether Georgia would agree to all these conditions.

Mr. Saakashvili had given a green light on Monday to a four- point plan proposed by Sarkozy's foreign minister Bernard Kouchner but some elements of Tuesday's plan appeared to be new.

The two sides continued to argue about whether they were abiding by the ceasefires they have already declared.

"Despite the Russian president's claims earlier this morning that military operations against Georgia have been suspended, at this moment, Russian fighter jets are bombarding two Georgian villages outside South Ossetia," the Georgian government said.

Russia's Defence Ministry dismissed the allegation as an "information provocation", adding that Georgian guns continued to pound its positions in South Ossetia.

Medvedev also dismissed as a "lie" Georgia's statements that it had observed a ceasefire for the last two days.

"Georgian forces continued to fire at peacekeepers, unfortunately people were killed yesterday...there was no ceasefire from the Georgian side," he said.

Russian markets, which had fallen sharply since the war began, rose on Mr. Medvedev's order to halt military action, with the rouble strengthening and shares rallying strongly.

Russia says 1,600 South Ossetian civilians have been killed in the fighting and thousands are homeless but these figures have not been independently verified. Georgia has reported close to 200 killed and hundreds of wounded.

Source

You (Ottawa Mens Centre.com, from Ottawa, Canada) wrote: Kudos to the G&M for being about the only Canadian media to accurately report the facts that "It began when Georgia tried to retake the pro-Russian region last week, provoking a massive counter-offensive from Moscow."
As a Canadian I am sickened by the Canadian press who have just regurgitated a White House press release that justifies painting black as white. The White House version goes like this, Poor little Georgia suffered an "disproportionate use of force" that the world must condemn.
The facts are not disputed, Georgia's crazy American educated president chose to commit genocide and ethnic cleansing on the opening day of the Olympics. His play was brilliant but evil. He knew that his mass murder event would be covered by the Olympics news and the first news most of the world would hear of was the massive Russian response.
Thousands of ethnic Russians were wiped out by throwing grenades in basements, shooting of women and children making the slightest movement. Georgian tanks drove right over women and children and grave yards. Their goal was to make sure every single living ethnic Russian was wiped out. Their goal was to provoke a guaranteed "response" and claim to be a tiny victim country.
This is akin to the Arab invasion of Israel and Israel's response. Also akin to Serbia.

Washington's influence over the Canadian press is extremely disturbing and shows American willingness to protect their own interests regardless of the facts.
In this case, an American / Georgian president deliberately set to cause genocide and mass murder of civilians. He is a war criminal and no doubt there are many thousands of people who want to see him brought to justice and tried as a war criminal. The United States increasingly is party to war crimes and relies upon its military and political power to make political decisions that incense the rest of the world. www.OttawaMensCentre.com

Source