European diplomats said that Moscow had sent a clear signal it would retaliate if the EU imposed sanctions to punish the Kremlin for its intervention in Georgia at an emergency summit next week.

Georgia's separatists

South Ossetia is a territory of about 70,000 inhabitants, the majority of whom are Orthodox Christians, located in the Caucasus mountains.

Referendums held in 1992 and again in 2006 demanded independence, but were not recognised internationally.

Abkhazia has about 250,000 inhabitants, most of whom have a Russian passport. The region makes up about 12 per cent of Georgian territory and the majority of Abkhazians are Muslim.

Abkhazia unilaterally proclaimed its independence in July 1992 and separatists pushed Georgian troops from the Kodori Gorge on August 12, 2008 - the only part of the region Georgia had controlled.

A day earlier, in a sign of growing Russian frustration with Western criticism, Vladimir Putin, the prime minister, accused the United States of orchestrating the conflict in Georgia, and linked the row to Russia's cooperation with the West on issues like trade and nuclear non-proliferation.

Moscow has expressed alarm at what it calls a Western naval build-up in the Black Sea, an area normally dominated by its own southern fleet.

Russia mounted a huge counter-attack on land, sea and air after Georgia sent in troops in a failed attempt to retake its breakaway region of South Ossetia three weeks ago.

The Kremlin said it acted to prevent Georgia wiping out the South Ossetian population but Western states accused Russia of using excessive force.

They are also concerned that the presence of Russian troops deep inside Georgia could compromise the Nato aspirant's role as a transit route for oil and gas supplies between the Caspian Sea and world markets.

Russian oil contracts

Bernard Kouchner, the French foreign minister, has said sanctions on Russia were among the options being considered before EU leaders meet on Monday to discuss the Georgia row.

Diplomats in Brussels have said there is no consensus on imposing sanctions.

Western policy-makers are mindful that Russia supplies more than a quarter of Europe's gas and that its support is vital to maintain pressure on Iran over its nuclear programme.

But Germany said on Friday it believes that Russia will stick to its contracts to deliver oil to Europe despite the threat of sanctions, a government spokesman said.

"We firmly believe that the contracts will be fulfilled," Chancellor Angela Merkel's spokesman Ulrich Wilhelm told reporters at a government news conference.

Georgia's parliament voted on Thursday to sever diplomatic relations with Moscow in response to the Kremlin's decision to recognise its South Ossetia and Abkhazia regions as independent.

The government has not yet decided whether to cut ties, because it said it had to weigh the interests of the hundreds of thousands of Georgians who work in Russia.

"We'll take the final decision ... within days," Temur Iakobashvili, the reintegration minister said.

"I think the decision will be more in favour of cutting diplomatic ties."

South Ossetia's future

Russia intends to eventually absorb South Ossetia, a South Ossetian official said.

Znaur Gassiyev, the South Ossetian parliamentary speaker, said Dmitry Medvedev, the Russian president, and Eduard Kokoity, the region's leader discussed the future of South Ossetia earlier this week in Moscow.

Gassiyev said Russia will absorb South Ossetia "in several years'' or earlier. He said that position was "firmly stated by both leaders".

In Moscow, a Kremlin spokeswoman said on Friday there was "no official information'' on the talks.

In Georgia, Gigi Tsereteli, the vice speaker of parliament, said the statement cannot be taken seriously.

"The separatist regimes of Abkhazia and South Ossetia and the Russian authorities are cut off from reality,'' he said in Tbilisi.

"The world has already become different and Russia will not long be able to occupy sovereign Georgian territory.''

"The regimes of Abkhazia and South Ossetia should think about the fact that if they become part of Russia, they will be assimilated and in this way they will disappear,'' Tsereteli said.