Russia orders halt to war, U.S. cancels exercise

By Chris Baldwin and Matt Robinson

MOSCOW/TBILISI (Reuters) - Russian President Dmitry Medvedev ordered a cease fire in Georgia on Tuesday, but U.S. officials could not confirm fighting had stopped and threatened Moscow's membership in important global clubs.

The United States also cancelled a joint naval exercise with Russia to show its disapproval of Moscow's military actions in Georgia, U.S. officials said.

"There is no way in good conscience that we could proceed with a joint naval exercise given the state of this crisis," a senior U.S. defense official said on Tuesday, speaking on condition of anonymity as no official announcement has yet been made.

The United States would like to see Russia's plans to integrate into international organizations succeed, but "that's what's at stake when Russia engages in behavior that looks like it's from another time," the official said.

The fighting erupted when Tbilisi tried to retake by force the pro-Russian region of South Ossetia last week. Moscow responded with a massive counter-offensive.

The conflict over the separatist province of South Ossetia, which seeks independence and threw off Georgian rule in the 1990s, has spooked markets and rattled the West.

Both Russia and Georgia have now declared a ceasefire, but each side has accused the other of failing to keep its promises.

French President Nicolas Sarkozy flew from Moscow to Tbilisi to meet Georgian leader Mikheil Saakashvili and said they had agreed to a modified version of a peace plan with Russia over the breakaway region of South Ossetia.

Sarkozy said the text would be presented to a meeting of European Union foreign ministers on Wednesday so they could throw their weight behind it. It would then provide the basis for a U.N. Security Council resolution.

In a first U.S. reaction to the ceasefire, Washington's envoy to the region, Matthew Bryza, termed the Russian move "extremely positive."

But American officials in Washington later adopted a harder line, pressing Russia to halt military operations and threatening Moscow's membership in organizations such as the World Trade Organization, the Organization for Economic Cooperation and Development and the Group of Eight.

Georgian President Mikheil Saakashvili earlier addressed a huge crowd outside parliament building in Tbilisi and was hailed as a hero for defending his country against aggression from Moscow.

Speakers denounced Russia as the crowd chanted: "Georgia, Georgia!" Posters held up by demonstrators showed a photograph of Putin with the caption: "Wanted: Crimes against humanity in the world."

Saakashvili appeared to cheers and pledged that one day Georgia would beat Russia. "I promise you today that I'll remind them of everything they have done and one day we will win," he said.

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