Russian troops backed by tanks and fighter jets took control of South Ossetia on Sunday after three days of intense battle, forcing US-allied Georgia to order its forces to retreat and call for a ceasefire amid increasing international concerns about the flare-up in the region.

Fighting rages in South Ossetia; 1,500 killed

"Georgian armed forces ceased fire in the Tskhinvali region" and an official note had been sent to the Russian side, Georgia said in a statement adding that it was ready to start negotiations on 'termination of hostilities'.

Foreign Ministers of Georgia and Russia [Images] held direct talks over phone on the prevailing situation, German Deputy Foreign Minister Gernot Erler told a television channel.

However, a Russian Foreign Ministry official told Interfax news agency that Georgian forces on the ground were continuing military action. A Russian military spokesman also said Georgia did not remove its forces and the situation remained tense.

Russia, which moved into South Ossetia after Georgia's US-trained troops launched an offensive to reclaim the breakaway province on Thursday, on Sunday bombed an aircraft- manufacturing plant on the outskirts Georgian capital Tbilisi and drove its troops out of South Ossetia's capital city of Tskhinvali with heavy shelling.

Russia wants Georgia to pull out its troops from South Ossetia as a condition to negotiate a ceasefire and has also demanded that Georgia should sign a pledge not to use force against the province that is enjoying de-facto independence since a separatist war in 1992.

The street fighting and bombing in the region have so far claimed nearly 2,000 lives, reports said.

Russian Prime Minister Vladimir Putin [Images], who directly flew to the neighbouring Russian region of North Ossetia from Beijing [Images], seems to be in the driver's seat in tackling the situation and relief operations.

Putin declared that Georgia by its military offensive has dashed the hopes of the restoration of its territorial integrity. "Nobody can now force South Ossetia and Abkhazia to return to the fold of Georgian sovereignty."

South Ossetia says an estimated 2,000 people have been killed in the Georgian assault. According to reports from Tbilisi, 45 Georgian soldiers and 40 civilians were killed in two days of hostilities in South Ossetia.

Some 150 people remain trapped under the rubble of the city hospital destroyed on the first day of the Georgian strike.

Russian planes are reported to have bombed Georgian military bases and airfields across the country as well as the seaport of Poti.

Efforts of international mediation intensified with French Foreign Minister Bernard Kouchner leaving for the region. He is expected to present a three-point peace plan to both sides.

Georgian President Mikhail Saakashvili appealed to the NATO and UN to 'stop Russian aggression' on his country.

Georgia borders the Black Sea between Turkey and Russia and was ruled by Moscow [Images] for most of the two centuries preceding the 1991 breakup of the Soviet Union. Both South Ossetia and another separatist province, Abkhazia, have run their own affairs without international recognition since fighting to split from Georgia in the early 1990s.