The 26 NATO foreign ministers, meeting in an emergency session in Brussels, accused Russia of carrying out the "deliberate destruction of civilian infrastructure" in the former Soviet republic.

"We call on Russia to take immediate action to withdraw its troops from the areas it is supposed to leave," under a French peace plan agreed by all sides, the NATO ministers said in a statement.

In a furious response, Russian Foreign Minister Sergei Lavrov blasted NATO as "unobjective and biased" and accused the transatlantic alliance of whitewashing a "criminal regime."

NATO Secretary General Jaap de Hoop Scheffer said that in the face of signs that Russia was failing to withdraw its soldiers and armour from Georgia, the Alliance was effectively freezing the NATO-Russia Council, the bilateral body established in 2002 as a framework for dialogue.

"We are not abandoning the NATO-Russia Council but as long as Russian forces are occupying a greater part of Georgia, I cannot see a NATO-Russia Council convening at any level," he added.

"The future of our relations with Russia will depend on the concrete actions Russia will take to abide by the words of President Dmitry Medvedev... which is not happening at the moment."

Almost immediately Russia's navy announced it was pulling out of a NATO exercise in the Baltic Sea and was unable to host a scheduled visit by a US naval frigate, RIA Novosti news agency reported.

US Secretary of State Condoleezza Rice, who had called the NATO meeting, stressed that "the United States does not want to isolate Russia."

"(But) the behaviour of Russia in this most recent crisis is isolating Russia from the principles of cooperation in the community of states," she told journalists in Brussels.

She said the Alliance was sending "a very clear statement that NATO, having come so far after the end of the Cold War and the collapse of the Soviet Union... is not going to permit a new line to be drawn in Europe."

The NATO ministers stressed Georgia's "independence, sovereignty and territorial integrity" and announced the setting up of a NATO-Georgia commission.

They also reaffirmed Georgia's future as a NATO member, despite denying Tbilisi official candidate statement at an Alliance summit in April.

Russia is strongly opposed to Georgia's moves to join NATO.

Scheffer also said 15 civil and emergency experts would be sent to assess the extent of the damage in Georgia and stressed that 150,000 refugees were in "dire need" of humanitarian aid.

"The Alliance is considering seriously the implications of Russia's actions for the NATO-Russia relationship," the foreign ministers said in their statement.

"We have determined that we cannot continue with business as usual," they said.

"We remain concerned by Russia's actions during this crisis and remind Russia of its responsibility for maintaining security and order in the areas where it exercises control, especially in light of continuing reports of Russia's deliberate destruction of civilian infrastructure."

Lavrov said Russia, which blames Georgia for starting the conflict by sending its forces into the breakaway Georgian region of South Ossetia, found the NATO statement unacceptable.

"The declaration above all appears unobjective and biased because there's not a word about how all this started, why it happened, who started the aggressive action and who armed Georgia," he said in Moscow.

In one positive sign for the peace process, the Organization for Security and Co-operation in Europe (OSCE) -- including Georgia and Russia -- agreed Tuesday in Vienna to send 20 observers "immediately" to Georgia to oversee the ceasefire deal.

The final green light came from Georgian President Mikheil Saakashvili, the organisation's chairman, Finnish Foreign Minister Alexander Stubb, said in Brussels.

In total, the OSCE said it would send up to 100 additional monitors to join the handful it already has in Georgia.

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