Georgia has ordered its forces to cease fire and offered to immediately begin talks with Russia to end hostilities.
'Georgian armed forces ceased fire in the Tskhinvali region,' a Georgian foreign ministry statement said.
It added that President Mikheil Saakashvili had ordered the ceasefire and that his message had been sent to the Russian side.
'Georgia expresses its readiness to immediately start negotiations with the Russian Federation on a ceasefire and termination of hostilities,' the statement said.
The White House responded using strong diplomatic language, warning Russia that its 'disproportionate and dangerous escalation' of the conflict could significantly harm relations between Washington and Moscow.
The US said that Russia's reaction to any Georgian withdrawal from South Ossetia would be a key test of the country's true intentions in the region.
Tbilisi international airport was hit in a Russian air strike, hours before the scheduled arrival of French Foreign Minister Bernard Kouchner
Russian forces have taken control of the main city in South Ossetia, Tskhinvali, Georgian interior ministry spokesman Shota Utiashvili has said.
There are also conflicting reports that Russian warships have set up a sea blockade to prevent arms and other military supplies from reaching Georgia.
Interfax news agency reported the blockade quoting a source in the Russian naval command.
Separately, RIA Novosti news agency quoted a senior navy source as denying that a blockade was in effect.
They said that the reports 'do not correspond with reality.
'A coastal blockade would mean war with Georgia. We are not in a state of war with Georgia,' the RIA Novosti source said.
The former soviet state has been fighting Russian troops for control of the separatist capital Tskhinvali for the past three days.
Russia earlier bombed a military airport outside the Georgian capital, Tbilisi.
Russia's bombing of Georgia's military airport, 12km from Tbilisi, is the latest target in a Russian air assault on its small neighbour following a Georgian push to re-take the pro-Moscow enclave of South Ossetia.`
Around 100 people, have held a protest outside the Russian Embassy in Dublin this afternoon. They held up banners and chanted 'no war in Georgia' and 'Russia get out of Georgia'.
Second front
There were signs of a second front opening in the conflict, with Georgia accusing Russia of sending troops by sea to the larger rebel region of Abkhazia on the Black Sea.
Sergei Bagapsh, head of Georgia's separatist region of Abkhazia, has said he has sent 1,000 troops to the disputed Kodori gorge and announced the mobilisation of reservists to reinforce its positions.
He said that the region is ready to act independently.
'We are ready to enforce order and go further if there is resistance from the Georgian side,' he said.
The leader of the breakaway Georgian region has decreed a 10-day state of war in areas close to Georgian-controlled territory, Russia's Interfax news agency has reported.
A UN peacekeeping official also warned of an imminent military offensive by the Abkhaz who, like the South Ossetians, broke with Tbilisi in the early 1990s after a war.
A Georgian ceasefire offer went unheeded by Moscow and separatists in the South Ossetian capital of Tskhinvali reported that Georgian forces, dug in on high ground outside the town, were continuing to fire on the town.
International response
Georgia has asked the US to act as a mediator with Russia in the crisis.
Georgian National Security Council Secretary Alexander Lomaia said they have asked US Secretary of State Condoleezza Rice to mediate with the Russians, to 'transmit them our message'.
The White House has said that continued Russian escalation would have 'significant' long term impact on US-Russian relations.
Ukraine has said it reserves the right to bar Russian warships dispatched to the Georgian coast from returning to their Ukrainian base of Sevastopol.
Russia's Black Sea fleet is based in the Ukrainian port of Sevastopol.
An EU-US delegation headed for Georgia to try to broker an end to the conflict in the heart of the volatile Caucasus, where Russia and the West are vying for influence over crucial oil and gas supply routes.
Russia poured troops into Georgia on Friday, dramatically upping the stakes in a long-running stand-off with the ex-Soviet republic over its pro-Western policies and its drive for NATO membership.
The confrontation has sparked alarm in the West and led to angry exchanges at the UN reminiscent of the Cold War.
The Security Council is to reconvene later today for consultations on the crisis.
Yesterday the council failed for the third time to agree on a joint call for a truce between Georgia and Russia.
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