"Russia's use of force was disproportionate and Russia must now comply with all elements of the six-point plan brokered by French president Sarkozy," de Hoop Scheffer said on Monday, referring to a ceasefire agreement France brokered on behalf of the EU which helped end the fighting.

"At the same time, despite the difficult situation, we expect Georgia to firmly stay the course of democracy and reform," the Nato chief told a meeting of ambassadors of the 26 Nato countries in a Tbilisi hotel.

"Dedication to these fundamental values remains essential for Georgia on its path to Euro-Atlantic integration."

Nato-Georgia commission

De Hoop Scheffer and the Nato ambassadors were in the Georgian capital for the inaugural session of the Nato-Georgia commission, conceived in the aftermath of the conflict to bolster ties with Tbilisi.

"Today indeed is a milestone in the history of the Nato-Georgia relationship," de Hoop Scheffer said after signing a document on the creation of the commission.

But the meeting is unlikely to bridge differences between members states about whether to go beyond a vague commitment issued this year that Georgia and fellow former Soviet state Ukraine will eventually be admitted.

Some members are wary of angering Russia and have doubts about Georgia's conduct in the conflict and its democratic credentials.

Kurt Volker, the US ambassador to Nato, whose country has been the strongest supporter of Georgia's membership bid, was cautious on when Tbilisi would get a firm invitation to join.

"We stand with Georgia. We want to be helpful. The actual decision on whether December is the time for the Membership Action Plan or not is something that will be taken later," Volker said.

On Monday, the European Commission in Brussels announced it would give $700m in aid over two years to help Georgia rebuild infrastructure destroyed in the fighting.

Russian warning

As the ambassadors arrived in Tbilisi, Dmitry Medvedev, Russia's president, warned the West that any sanctions imposed on Moscow over the war in Georgia would backfire.

"It's senseless to pressure Russia with sanctions,'' Medvedev said at a meeting with Russian business leaders.

Sanctions on Russia would backfire, Medvedev said [AFP]

"They can shut a couple of sources of [revenue] to a banana republic and make its situation dramatic. It won't work like that here.''

Without mentioning any specific nation, Medvedev warned that attempts to punish Russia would also hurt the West.

"Sanctions is a weapon that will backfire,'' he said. "If attempts are made to introduce sanctions, damages will be symmetrical.''

The president also dismissed calls by some Western diplomats to prevent Russia from joining the World Trade Organisation (WTO).

Russia would like to join the WTO but would not be pressured into concessions, Medvedev said.

"The WTO isn't a carrot, it entails a lot of difficult obligations,'' he said. "And if we do it, let us do it in a normal way without them trying to scare us.''

Difficult concessions

Last month's Russian military push into Georgia to repel a Georgian attack on South Ossetia has been condemned by the alliance, as has Moscow's subsequent recognition of South Ossetia and another breakaway region, Abkhazia, as independent.

Under an European Union-backed deal all Russian troops will leave uncontested parts of Georgia by the middle of next month, while 7,600 Russian soldiers, more than twice the pre-war levels, will remain in South Ossetia and Abkhazia.

In an interview published on Monday in London's Financial Times newspaper, de Hoop Scheffer said the EU agreement to help end the conflict had been "difficult to swallow" because it made too many concessions to Russia.

"If the Russians are staying in South Ossetia with so many forces, I do not consider this as a return to the status quo," de Hoop Scheffer said.

"The option of keeping Russian forces in South Ossetia and Abkhazia is not acceptable."