Heavy fighting was reported early this morning in the capital of the breakaway region of South Ossetia after Georgian forces, backed by war planes, launched an assault on Russian-backed rebels.

The battles erupted shortly after President Saakashvili, of Georgia, made a dramatic appeal for a ceasefire after a day of heavy clashes that claimed at least 15 lives.

In a televised address, Mr Saakashvili offered “an immediate ceasefire and an immediate beginning of talks” with the separatist region. He repeated an offer of autonomy within Georgia, saying that he was willing to make Russia the guarantor of any agreement.

However, shortly before midnight, the Georgian Government announced that it had begun an “operation to restore constitutional order”. Witnesses said the night sky over Tskhinvali, the rebel region’s capital, was lit up by explosions.

“Georgian troops are storming Tskhinvali. They are bombing the city,” said Eduard Kokoity, South Ossetia’s separatist leader. Hundreds of Russian and Abkhazian volunteers were reported to be heading to the region to help out the rebels. Georgian officials said the “mercenaries” were arriving from Russia with tanks and other heavy military equipment.

In Tskhinvali, thousands of people took refuge from the shelling in make-shift shelters in the cellars of their homes. Russian television showed pictures of houses on fire.

"We have been sitting here for two days already," an elderly woman surrounded by members of her family told Russia's Vesti-24 television. "It is scary. We don't know whether Georgians are advancing or what," she added nervously trying to fix a candle in the dark vault. "We even did not have time to take radios."

In New York, members of the U.N. Security Council began an emergency late night session to discuss a Russian-drafted statement that would have the council expressing "serious concern at the escalation of violence"; and calling on all sides "to cease bloodshed without delay and to renounce the use of force".

A Georgian diplomat had no immediate comment on whether his nation would agree to put down its arms.

The Russian Foreign Ministry, in a late-night statement, appealed for efforts to prevent huge bloodshed. "It is not too late to avert massive bloodshed and new victims," it said. "Russia will continue efforts to avert the bloodshed and restore peace in South Ossetia."

Tensions between Georgia and Russia have soared since April when the outgoing President, Vladimir Putin, told officials to strengthen economic ties with South Ossetia and Abkhazia, Georgia’s other breakaway region.

Both regions seceded from Georgia in the early 1990s and most residents have Russian passports. Moscow gave warning this week that it would not remain indifferent if war broke out. That prospect appeared closer than at any time in the past 15 years when separatist leaders and the Georgian Interior Ministry reported the worst fighting in a decade in South Ossetia involving artillery and mortar fire.

Daniel Fried, the US Assistant Secretary of State, said at one point that the United States and Russia had agreed to work to end the fighting. He said that he had spoken to Grigori Karasin, the Russian Deputy Foreign Minister, and “we agreed to work together to get the fighting stopped in South Ossetia and encourage political dialogue”.

Mr Karasin blamed Georgia for the violence and claimed that Tbilisi was preparing for war. He cautioned that the situation had “reached a dangerous point”.

Russia was outraged as Georgia mounted its fresh offensive. “Georgia’s step is absolutely incomprehensible and shows that the Georgian leadership has zero credit of trust,” said Yuri Popov, the Russian envoy sent to the region to mediate peace talks.

Georgia blames Russia for inciting the separatists. “It is all a result of hysterical militarisation, constant military rhetoric and real military propaganda conducted by Russian television stations,” Mr Saakashvili said, urging the two countries to “pool our efforts to end this madness”.

There were reports that a convoy of thirty buses and seven military trucks filled with Georgian soldiers had been spotted near Gori, at the southern edge of South Ossetia, waiting at a checkpoint. Abkhazia said that it had put its forces on combat alert in response to the deepening crisis.

Mr Saakashvili has pledged to reclaim both regions and accuses Moscow of attempting to annex them. The pro-Western Government in Tbilisi is convinced that Moscow is stirring trouble now to wreck Georgia’s bid for membership of Nato when the alliance meets in December. Mr Popov urged Nato last night to review Georgia’s application in the light of recent developments.

Russia admitted last month that it sent fighter jets to circle South Ossetia as Condoleezza Rice, the US Secretary of State, was visiting Tbilisi. Mr Saakashvili accused Moscow of an act of aggression and a State Department official gave warning of catastrophe unless Russia halted pressure on its former Soviet satellite.

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