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TBILISI, Georgia (CNN) -- Georgian President Mikheil Saakashvili signed a cease-fire agreement on Friday, which the U.S. said means Russian troops must begin withdrawing.

U.S. Secretary of State Condoleezza Rice said the priority now was "all Russian troops and irregulars that entered Georgia with them must leave immediately."

Rice said international observers should be dispatched quickly to Georgia and its separatist regions of South Ossetia and Abkhazia where currently Russia has a peacekeeping mission.

Saakashvili warned at a joint news conference with Rice that "this is not a done deal yet" unless it included ways of stopping a repeat.

"We are under Russian occupation," he said.

President Bush earlier chided Russia for Cold War-style behavior in its territorial conflict with Georgia, accusing it of "bullying and intimidation" as international pressure grew on Moscow to withdraw its troops from the region.

Russian President Dmitry Medvedev remained defiant over Moscow's actions saying Russia had brought peace to the region.

Russian troops remained in control of two key Georgian cities despite pledges of a withdrawal. The Russians occupied the cities of Gori and Poti after conflict flared over the breakaway province of South Ossetia.

Reports emerged Friday of widespread looting in the decimated city of Gori and witnesses said they heard small-arms fire in South Ossetia, one of the two disputed territories at the center of the conflict.

But Russia's military spokesman said Friday that "there's absolutely no firing" under way in Georgia and that his government is concentrating on getting humanitarian aid to residents there.

Bush said the United States stands "with the people of Georgia and their democratically elected government." Video Watch President Bush on 'why Georgia matters' »

He said the country's sovereignty and territorial integrity "must be respected."

Medvedev said Russia will "guarantee" peace in the Caucasus region but made no commitment to remove Russian forces from Georgia or the breakaway territories of South Ossetia and Abkhazia.

"Peace needs to reestablished in the region and guaranteed and underpinned so that no one again will get idiotic ideas, and this I see as the main task of the Russian Federation," Medvedev told reporters.
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German Prime Minister Angela Merkel, in a joint press conference with Medvedev, called for the withdrawal of Russian troops from central Georgia, where they remain in control of large areas of the country.

Merkel said both sides were largely to blame over the conflict, which began on August 6 when Georgia began an offensive against separatists in South Ossetia.

International rights body Human Rights Watch on Friday accused Russia of dropping cluster bombs -- outlawed by more than 100 nations -- on Georgia, killing civilians. The claim was denied by Russian officials.

A senior U.S. State Department official told CNN Rice took to Tbilisi papers to close a loophole in a hastily written preliminary peace plan that Georgia and Russia agreed to this week.

The internationally-mediated cease-fire was struck Tuesday after five days of fighting broke out in South Ossetia, where Moscow says it needs a peacekeeping presence to protect Russian citizens. View a map of the region »

Under Rice's plan, new wording would clarify that Russian would have a "very limited to a light patrolling ability, such as a few kilometers outside of South Ossetia, not the right to maintain a presence inside Georgia."

Immediately afetr the joint U.S.-Georgian news conference it was not clear if or how the text of the cease-fire agreement had changed.

In addition to Rice's involvement in the peace process, the United States has also pledged "unwavering support" for Georgia, warning Russia of a major breakdown in relations unless it scales down its military action. Video Watch the latest on Rice's mission »

Analysts see the conflict in Georgia, which is seeking NATO and EU membership, as having wider international implications as Russia seeks to reduce Western influence on its doorstep.

It is unclear how many people have been killed in the conflict, but claims but the toll in the thousands while the U.N.'s refugee agency said more than 118,000 people have been displaced.

According to U.S. officials, Russia is currently exploiting wording in the current deal, brokered by French President Nicolas Sarkozy, to justify its presence in Georgia, in addition to the occupation of breakaway enclaves South Ossetia and Abkhazia.

Saakashvili said Russian troops control about one-third of his country.

Russia's military spokesman said "there's absolutely no firing" under way in Georgia and that his government was concentrating on getting humanitarian aid to residents there. iReport.com: How is the Russia-Georgia conflict affecting you?

Colonel-General Anatoly Nogovitsyn said the humanitarian supplies are coming "primarily from the Russian side." Video Watch devastation in port of Poti »

The U.N. High Commissioner for Refugees said Friday it estimated that more than 118,000 people have been displaced by the fighting, citing statistics supplied by the Russian and Georgian governments.
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About 30,000 people from South Ossetia fled to Russia, according to officials in the Russian region of North Ossetia, while up to 15,000 people from South Ossetia went south into Georgia proper, the Georgian government said.

Around 73,000 people in Georgia proper are displaced, including most of the population of Gori.


So am I the only one who's curious about where this is leading? It seems like US/Russian relations have been getting worse and worse and this doesn't seem to be helping much