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

* Russia halts war as Sarkozy begins peace mission

* Georgia says Moscow still bombing

* U.S. cancels joint Russian naval exercise

* Georgians rally against Russia, hail Saakashvili



By Chris Baldwin and Matt Robinson

MOSCOW/TBILISI, Aug 12 (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 organisations succeed, but "that's what's at stake when Russia engages in behaviour 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 organisations such as the World Trade Organisation, the Organisation 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.



LEAVING THE CIS

The Georgian leader also said his country was quitting the Commonwealth of Independent States, a loose grouping of ex-Soviet states led by Moscow, in protest over Russia's actions.

The main military action on Tuesday was a push by Abkhazia, a second breakaway region of Georgia on the Black Sea coast, against Georgian forces in a corner of the territory.

Abkhaz leader Sergei Bagapsh said his troops had "fully regained control over the upper part of the Kodori Gorge," a narrow strip of land cutting into Abkhazia. Russian forces said they were not involved.

Closer to South Ossetia, a series of sudden explosions in the Georgian town Gori, about 70 km (40 miles) west of Tbilisi, killed at least five civilians, a Reuters correspondent said.



CRATERS IN THE STREET

Television footage and pictures suggested the blasts were caused by mortars firing from 1 to 2 km (0.5 to 1 mile) away, though it was not clear who was responsible. Russian forces were reported to be around 12 km (7 miles) away at the time and denied attacking the town, birthplace of Soviet leader Josef Stalin.

A Reuters witness said blasts shook the town in quick succession, gouging craters in the street and sending shrapnel flying through the air.

Broadcaster RTL later said a Dutch cameraman was among the dead and a correspondent was wounded.

Further north in the separatist capital Tskhinvali, houses were still burning, surrounded by orchards and chestnut groves, after the battles of the last week. Russian tanks and armoured personnel carriers patrolled the almost deserted streets.

Teimuraz Pliyev, 62, said he had spent three days hiding in a basement with his wife and children.

"It looks like a small Stalingrad, doesn't it?" he told reporters. "Barbarians! Look: this is Georgian democracy! If it weren't for Russia, we would have already been buried here."

A Russian army colonel, who declined to be identified, said: "There's still some occasional sniper fire, but we are finishing them off steadily and surely."

Russian authorities said 16,500 refugees had fled over the border from South Ossetia into Russia and were being looked after in camps.

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. (Additional reporting by Guy Faulconbridge, Conor Sweeney and Simon Shuster in Moscow, Francois, Margarita Antidze and James Kilner in Tbilisi, Dmitry Solovyov in Tskhinvali, Andrew Gray in Washington; writing by Michael Stott; editing by Sami Aboudi)

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