Georgia denies war plans in breakaway region

AVNEVI, Georgia (Reuters) - Georgia on Tuesday denied preparing for war in its breakaway South Ossetia region following deadly weekend clashes that have raised fears of a new war in the Caucasus.

Russia said it would not be indifferent if there was further violence on its border, escalating a war of words in a region where Moscow and the West are vying for influence over vital energy transit routes.

"If events develop according to the worst-case violence scenario, Russia will not allow itself to remain indifferent, considering that Russian citizens live in South Ossetia, particularly in the conflict zone," Interfax news agency quoted Russian special ambassador Yuri Popov as saying.

But Georgia rejected accusations of indiscriminate shelling of Ossetian-held areas over the weekend, and denied it was preparing for conflict.

"We are not mobilizing forces, we are not getting ready for war," deputy Interior Minister Ekaterine Zguladze told Reuters in the Georgian-held village of Avnevi in South Ossetia.

"There is no military build-up whatsoever on the Georgian side," said Zguladze. NATO said on Tuesday it was "not aware of any troop concentrations by Georgia in or near South Ossetia."

South Ossetia and Georgia's Black Sea region of Abkhazia broke away from Georgia after fighting wars against Tbilisi in the 1990s. Both have financial and political support from Moscow and the vast majority of locals have Russian citizenship.

But the frozen conflicts are fast beginning to thaw, particularly since pro-Western President Mikheil Saakashvili took power in 2003 and angered Russia by pledging to steer ex-Soviet Georgia towards membership of NATO.

"SPIRAL OUT OF CONTROL"

Georgia is at the heart of the Caucasus, an unstable region hosting the only pipelines pumping gas and oil from the Caspian Sea to world markets without going through Russia.

South Ossetia is a mosaic of separatist-controlled territories centered on the regional capital Tskhinvali and Georgian-populated villages loyal to Tbilisi scattered across the province. Russia has peacekeepers in the area.

Georgian authorities on Tuesday bussed foreign diplomats and media through hardscrabble Georgian villages skirting Tskhinvali to show pockmarked walls and collapsed roofs from what they said was unprovoked shelling by Ossetian forces.

Six people died on the Ossetian side, and Georgia and South Ossetia have been trading blame ever since.

Tbilisi accused Moscow of "deliberate support for separatist regimes on Georgian land." The Russian peacekeepers, it said, were propping up the South Ossetians.

"The Russian Federation is carrying out on Georgian land an aggression and actions that violate Georgia's sovereignty," the Defence Ministry said in a statement.

It said Tbilisi remained committed to peace talks, which are currently deadlocked.

In Washington, the State Department warned against provocative actions by any of the parties.

"It is important for us that, number one, that the violence stops and, number two, that a dialogue begins and so that they can continue to discuss the issues there," spokesman Gonzalo Gallegos said.

NATO said it was following the situation, but that it was not aware of any troop build-up by its ally Georgia.

"We call on all parties to de-escalate the tensions," said alliance spokeswoman Carmen Romero. EU president France called for the "swift resumption" of negotiations.

Popov, who heads Russia's delegation to a joint commission trying to resolve the conflict, said senior officials from both sides were due to meet on Thursday.

"I don't want to make any grim predictions, but if such events are repeated, the situation may spiral out of control and lead to sad consequences," he said.

(Additional reporting by Conor Sweeney and Dmitry Solovyov in Moscow and Margarita Antidze in Tbilisi; editing by Sami Aboudi)