Georgia has claimed it has regained control of the capital of the breakaway region of South Ossetia as it teeters on the brink of all-out war with Russia.
President Mikheil Saakashvili said about 30 Georgians have been killed in daylong fighting between separatist forces and the Georgian military.
It was reported earlier that some 150 tanks and armoured vehicles sent into the region by Moscow in support of the ethnic Russian South Ossetians had entered the capital Tskhinvali.
The press service of the breakaway region had claimed Georgian troops had started to retreat.
But Mr Saakashvili said Georgian troops were now in control of the city. "Tskhinvali and the heights around Tskhinvali and the majority of the villages in South Ossetia are under the control of Georgian forces."
The president of South Ossetia, Eduard Kokoity, was quoted as saying about 1,400 people had been killed as a result of "Georgian aggression".
Moscow said its troops were responding to a Georgian assault to re-take the breakaway region. It said at least 12 Russians have been killed and 150 others were injured.
Nato, the European Union and the United States, a vocal Georgian ally, all urged a halt to the violence.
In an interview with CNN, the pro-Western Mr Saakashvili said, "Russia is fighting a war with us in our own territory."
"We have Russian tanks moving in. We have continuous Russian bombardment since yesterday ... specifically targeting the civilian population," he claimed.
"We are in this situation of self-defence against a big and mighty neighbour. We are a country of less than five million people and certainly our forces are not comparable," the president said. "It would be suicidal for us to provoke Russia."
He claimed Russia had been preparing for the war for years and amassing troops on Georgia's border for months.
In a later interview, Mr Mr Saakashvili accused Russia of "unhidden aggression" that was a challenge to the whole world. "If the whole world does not stop Russia today, then Russian tanks will be able to reach any other European capital."
In Beijing, Russian prime minister Vladimir Putin discussed the situation with US president George W. Bush, telling him that "war has started" in the region, Mr Putin's spokesman said. "The Georgian leadership has resorted to very aggressive actions", the spokesman said. "There are casualties, including among Russian peacekeepers. This is very sad and this will incur a response."
The United States asserted its support for Georgia's territorial integrity and urged an immediate ceasefire in South Ossetia. “We urge all parties, including Georgians, South Ossetians and Russians to de-escalate and avoid conflict," US State Department spokesman Gonzalo Gallegos said.
US Secretary of State Condoleezza Rice urged Russia to withdraw combat troops from Georgia and stop air strikes. "We call on Russia to cease attacks on Georgia by aircraft and missiles, respect Georgia's territorial integrity, and withdraw its ground combat forces from Georgian soil," she said in a statement.
EU foreign policy chief Javier Solana said he had spoken to the Russian and Georgian foreign ministers, Sergei Lavrov and Eka Tkeshelashvili, to call for an end to the violence. "I am deeply concerned over the dramatic situation in Georgia and I deplore the loss of human lives and the suffering inflicted on the civilian population," he said in a statement.
Envoys from the EU, the US and the OSCE, Europe's main rights body, will travel to Georgia to try to broker a ceasefire in the breakaway region of South Ossetia, EU president France said tonight.
The US State Department said earlier the US would send an envoy to the region but did not name the representative nor give a departure time.
Mr Lavrov claimed Moscow was receiving reports that villages in South Ossetia were being ethnically cleansed. "The number of refugees is climbing, the panic is growing, people are trying to save their lives," he said.
The International Committee of the Red Cross called for aid agencies to be allowed access to civilians and evacuate those wounded in the escalating violence. "The humanitarian situation in the conflict zone has worsened dramatically," said Dominique Liengme, head of the ICRC's delegation for Georgia.
The crisis, the first to confront Russian president Dmitry Medvedev since he took office in May, has fuelled fears of full-blown war in a region emerging as a key energy transit route and where Russia and the West are vying for influence.
Georgia said its operation, launched after a week of clashes between separatists and Georgian troops in which nearly 20 people were killed, was aimed at ending South Ossetia's effective independence, won in a 1991-92 war.
Georgian prime minister Lado Gurgenidze said the operation would continue until a "durable peace" had been reached. The Kremlin said Mr Medvedev had summoned his top security advisers to discuss how to restore peace and defend civilians "within the peacekeeping mandate we have".
Mr Saakashvili, who wants to take his small Caucasus nation into Nato, has made it a priority to win back control of South Ossetia and Abkhazia, another rebel region on the Black Sea.
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.