Update- Putin: "War has started" between Russia and Georgia

Aug. 8 (Bloomberg) -- Russian Prime Minister Vladimir Putin said ``war has started'' in the breakaway region of South Ossetia while Georgia accused Russia of ``a well-planned invasion'' and appealed to world leaders for help.

Russian ``volunteers'' are pouring over the border to help defend South Ossetia from Georgian forces, Putin told U.S. President George W. Bush in Beijing today, according to Putin spokesman Dmitry Peskov.

Georgian President Mikheil Saakashvili accused Russia of ``full-blown military aggression'' after civilians died in aerial bombings and wide-spread fighting in and around the disputed region. The country of 4.6 million people is fighting ``to secure its borders,'' Saakashvili told Bloomberg Television.

The U.S., European Union and NATO all called on both sides to end hostilities. The ruble dropped the most against the dollar in 8 1/2 years and Russian stocks tumbled today on concern the conflict will worsen.

South Ossetia, which has a population of about 70,000 and is less than half the size of Kosovo, broke away from Georgia in the early 1990s and now is a de facto independent state with Russian peacekeepers and economic support. Georgia, a U.S. ally that wants to join the North Atlantic Treaty Organization, accuses Russia of stoking tensions in South Ossetia and another separatist region, Abkhazia.

Georgian troops are nearing the capital of the separatist region of South Ossetia after a night of heavy shelling and air strikes on rebel positions.

Fighting around Tskhinvali resumed just hours after both sides agreed to a ceasefire and Russian-mediated talks.

Georgia says its aim is to finish "a criminal regime" and restore order.

An emergency meeting of the UN Security Council failed to agree on a Russian statement calling on both sides to renounce the use of force.

At least 15 people are reported to have been killed and three Russian peacekeepers are among the wounded. Both sides blame each other for breaking the ceasefire.

Georgia's Prime Minister Lado Gurgenidze told reporters on Friday the military operations would continue until there was "a durable peace".

"As soon as a durable peace takes hold we need to move forward with dialogue and peaceful negotiations," he told reporters.

South Ossetian leader Eduard Kokoity told Interfax news agency his forces were still in control of the city, but Georgia claims to have Tskhinvali surrounded.

Russian fighters

The Russian envoy to the UN, Vitaliy Churkin, described Georgia's actions as "treacherous".