Latest on Russia-Georgia conflict
*Russia halts operations in Georgia
*Georgia withdraws from Abkhazia's Kodori gorge
*Georgia asks NATO for military assistance
*Saakashvili says to leave the CIS
*South Ossetia leader urges unification with north
*U.S. preparing economic aid package for Georgia
*Turkey loses $300,000 a day on BTC
"Our peacekeepers are continuing to perform their duties and will continue to perform their duties because they are a key factor for upholding security in the Caucasus," Medvedev said at a news conference with Sarkozy in Moscow.
Russia and Georgia had agreed to a ceasefire but had not agreed to a peace deal, Sarkozy told the conference.
"We do not yet have peace deal, we have a provisional cessation of hostilities but this is significant progress," Sarkozy said.
Medvedev earlier ordered a halt to military operations in Georgia on Tuesday after five days of fighting, before Sarkozy was to hold peace talks in Moscow. He added a full settlement of the military conflict with Georgia was subject to two conditions, including Georgia moving its troops to pre-conflict positions.
"We can discuss the question of a definitive settlement if two conditions are met," Medvedev said before meeting Sarkozy. "First, Georgian troops should return to their initial position and be partly demilitarized. Second, we need to sign a binding agreement on non-use of force."
Sarkozy had earlier referred to Moscow's order to halt operations as "good news".
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.
Georgia needs more evidence of a Russian halt to military operations and will remain "prepared for everything" until Moscow signs a peace deal, Georgian Prime Minister Lado Gurgenidze said on Tuesday.
"We will need more evidence, everyone in this situation needs a signed binding agreement," Gurgenidze told Reuters by telephone from an extraordinary meeting of parliament.
"Until that happens we are mobilized, we are prepared for everything," he said. "I do appreciate it (Medvedev's gesture) but there has been more damage to infrastructure and civilian casualties today."
"President (Mikhail) Saakashvili has signed the four-point Kouchner plan, which is being discussed in Moscow right now. Signing that would be a start," Gurgenidze said.
Georgia had earlier agreed to a plan proposed by 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.
GEORGIA TO LEAVE CIS
Saakashvili said he would pull his country out of the Commonwealth of Independent States (CIS) grouping ex-Soviet states, Russian news agencies reported.
"We are leaving the CIS for good and propose that other countries leave this body run by Russia," Interfax news agency said Saakashvili told a large rally held in his support outside Georgia's parliament.
GEORGIA'S NATO MEMBERSHIP
NATO said Tuesday its summit pledge this year that Georgia will one day become a member of the alliance still stands despite fighting with Russia over South Ossetia.
"I think that the Bucharest communique stands," NATO Secretary-General Jaap de Hoop Scheffer told a news conference after allied ambassadors met Georgia's ambassador to discuss the crisis.
"And no ally will do anything away from the Bucharest declaration ... That situation has not changed," he said.
Russia is fiercely opposed to Georgia's aspirations to join the U.S.-led military alliance, which many analysts believe was one of the causes of this month's fighting.
Scheffer said NATO nations condemned Russia's "excessive, disproportionate use of force", adding its decision to stop its troops advancing in Georgia is not enough.
RUSSIA DENIES GEORGIAN PEACEKEEPERS
Russian Foreign Minister Sergei Lavrov said earlier Moscow could not agree to the plan if it included Georgians in a future peacekeeping force because they had attacked Russian colleagues during Tbilisi's push to recapture breakaway South Ossetia.
"They can no longer remain. They brought shame upon themselves as peacekeepers. They committed crimes," he told a news conference.
Lavrov also said the "only way" to end fighting in Georgia is with a total Georgian withdrawal from the breakaway South Ossetia region and an agreement to renounce the use of force, adding Saakashvili should leave office.
"It would be best if he left," Lavrov told a news conference. "I don't think Russia will feel like talking with Mr. Saakashvili after what he did to our citizens," Lavrov said.
In Georgia, Russian forces attacked positions in and around the town of Gori on Tuesday, killing at least five people, news agencies reported. There were isolated skirmishes along the front line but no major offensives by either side overnight.
Broadcaster RTL said on Tuesday Dutch cameraman Stan Storimans had been killed during a Russian bombardment of Gori and another Dutch correspondent had been wounded. Five people had been killed during the bombing, it added.
Separatists in the Black Sea region of Abkhazia, west of the main war theatre, launched a push early on 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.
Georgian officials said on Monday evening that Moscow had seized Gori, cutting the country in half, and Russian troops were advancing on Tbilisi to overthrow Saakashvili's government.
STRAINED RELATIONS WITH WEST
U.S. President George W. Bush appeared to support that view, saying on Monday that Russia had invaded a sovereign neighboring state and threatened a democratic government."
Lavrov said in response that Russia had no intention of overthrowing Saakashvili though he should resign because "he can no longer be our partner".
Bush told Moscow to end its military action and accept a peace agreement, saying its moves had jeopardized 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 an important 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.
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.
The number of people displaced by the South Ossetia conflict has reached 100,000, the United Nations Refugee Agency said Tuesday, as U.N. agencies urged authorities to open up humanitarian corridors.
"COLD WAR MENTALITY"
Moscow has snubbed Western pleas for a ceasefire and Prime Minister Vladimir Putin, taking a leading role in the crisis, has accused Georgia of sparking the crisis.
"The Cold War has long ended but the mentality of the Cold War has stayed firmly in the minds of several U.S. diplomats. It is a real shame," Putin said.
Russian officials have said they have no intention of occupying territory beyond South Ossetia and Abkhazia.
GEORGIA APPEALS TURKEY FOR HELP
Georgia called for a U.N. peacekeeping force to intervene to halt its conflict with Russia, and said its battered forces had retreated to defend the capital Tbilisi.
Georgian Foreign Ministry made a call to all friendly countries and international organizations and asked for military assistance, Irakli Koplatadze, Charge D'Affaires of Georgian Embassy in Ankara, said on Monday.
The call was relayed to Turkish executives through a note, Koplatadze was quoted by Anatolian Agency as saying in a news conference in Georgian Embassy in Ankara.