Russia urges West to refrain from sanctions

By Conor Sweeney

MOSCOW (Reuters) - Russia and European powers took a step back from confrontation over Georgia on Friday, with Moscow urging the EU not to rush into punitive action and France saying now was not the time for sanctions.

Western governments have criticised Russia for sending troops deep into its ex-Soviet neighbour Georgia and recognising Georgia's two breakaway regions as independent, drawing comparisons with the rhetoric of the Cold War.

Georgian President Mikheil Saakashvili made a surprise visit late on Friday to the flashpoint port of Poti, which Russian troops continue to patrol as part of a Moscow-imposed security zone hotly contested by the Tbilisi government and the West.

"They are occupiers here, they are occupiers all around Georgia," Saakashvili told reporters, referring to Russian troops who man checkpoints just outside the town.

Earlier, Tbilisi said it would cut diplomatic ties with Moscow after Russia recognised its rebel South Ossetia and Abkhazia regions. A Russian Foreign Ministry source told the RIA news agency that Moscow would close its embassy in Tbilisi.

Diplomats said they received signals from the Kremlin that Russia would retaliate if the EU imposed punitive measures when leaders of the bloc, which depends on Russian energy imports, meet in Brussels on Monday.

But Russian oil companies and government officials denied a British newspaper report that they were preparing to restrict oil supplies in response to sanctions.

A senior diplomat for EU president France said sanctions would not be adopted at the summit, contradicting remarks on Thursday by French Foreign Minister Bernard Kouchner, who said sanctions were among the options on the table.