Germany proposes EU Georgia "neighbourhood" meeting

BERLIN (Reuters) - German Chancellor Angela Merkel has proposed that the European Union stage a "neighbourhood conference" for Georgia which will include bordering states, a government spokesman said on Saturday.

"This is solely a conference aimed at supporting and strengthening Georgia in economic terms," government spokesman Thomas Steg said. "It's not a conference aimed at finding a political solution to the conflict."

German weekly magazine Der Spiegel said Merkel's vision was for neighbouring countries like Armenia and Azerbaijan to participate in the conference, but not Russia.

"A decision about the whether, when and who is entirely the responsibility of the EU presidency," another spokesman said.

The proposal had been forwarded to France, which currently holds the six-month rotating presidency of the EU.

Georgia has suffered extensive damage to housing and infrastructure since a Russian military intervention earlier this month in response to fighting between Georgian forces and rebels in the breakaway province of South Ossetia.

On Saturday, Georgian troops were back in control of the country's main East-West highway after Russian forces pulled back, but Washington condemned the Kremlin for keeping what Moscow describes as peacekeepers in Georgia's heartland.

In an earlier statement, spokesman Steg said Russia must immediately withdraw from Georgia and pull its troops back to positions held before the recent outbreak of hostilities.

(Reporting by Gernot Heller, writing by Dave Graham; Editing by Angus MacSwan)