The BBC reports:
Russian forces are locked in fierce clashes with Georgia inside its breakaway South Ossetia region, reports say, amid fears of all-out war.
Moscow sent armoured units across the border after Georgia moved against Russian-backed separatists.
Russia says 12 of its soldiers are dead, and separatists estimate that 1,400 civilians have died.
Georgia accuses Russia of waging war, and says it has suffered heavy losses in bombing raids which Russia denies.
Russian tanks have reportedly reached the northern suburbs of the regional capital, Tskhinvali, and there were conflicting claims about who was in control of the city.
"Now our peacekeepers are waging a fierce battle with regular forces from the Georgian army in the southern region of Tskhinvali," a military official was quoted as saying by the Russian news agency, Interfax.
Georgian forces had moved on Thursday night to regain control of the province, which has had de facto independence since a war against Georgia that ended in 1992.
Georgian President Mikhail Saakashvili said Russia was making war on his country.
He told the BBC: "Our troops are attacked by thousands of troops coming in from Russia."
He said Georgia had shot down several Russian planes and accused Moscow of bombing Georgian air bases and towns, resulting in the death of 30 military personnel and civilians.
Despite denials from Moscow, the Russian air force has been carrying out air raids in South Ossetia and Georgia itself, says the BBC's Richard Galpin, in Gori, eastern Georgia.
Russian President Dmitry Medvedev said he had to act to defend South Ossetia's civilians, most of whom have been given Russian citizenship.
He also voiced anger over the reported fatalities of Russian servicemen in the breakaway province.
"We will not allow their deaths to go unpunished," he said. "Those responsible will receive a deserved punishment."
Russian Foreign Minister Sergei Lavrov said Moscow had received reports that villages in South Ossetia were being ethnically cleansed.
The BBC's Matthew Collin in Tbilisi says battles continue around Tskhinvali with the sound of explosions, rocket fire and military planes flying overhead.
Witnesses said the regional capital was devastated.
Fleeing resident Lyudmila Ostayeva, 50, told AP news agency: "I saw bodies lying on the streets, around ruined buildings, in cars. It's impossible to count them now. There is hardly a single building left undamaged."
International Red Cross spokeswoman Anna Nelson said it had received reports that hospitals in Tskhinvali were having trouble coping with the influx of casualties and ambulances were having trouble reaching the injured.
In other developments:
* Georgia's president said his country was calling home 1,000 troops from Iraq to help deal with the crisis
* Russia said it would cut all air links with Georgia from midnight on Friday
* The US voiced support for Georgia's territorial integrity after President George W Bush spoke with Russian PM Vladimir Putin about the conflict at the Beijing Olympics
* The European security organisation, the OSCE, warned that the fighting in South Ossetia could escalate into a full-scale war
* The US and the EU were reported to be sending a joint delegation to the region to seek a ceasefire and Nato said it was seriously concerned