Georgia accused Russian soldiers of violating a fragile truce on Wednesday by killing a Georgian policeman, as a major crack appeared in the EU-brokered ceasefire over the remit of EU observers.
The Georgians said it was the first fatal shooting since the August 12 ceasefire that brought an end to the five-day war between Georgia and Russia over Georgia's breakaway region of South Ossetia.
"This is the first time that Georgian police or military personnel have been shot at since the ceasefire began," Georgian interior ministry spokesman Shota Utiashvili told AFP.
An unnamed spokesman for the Russian forces in South Ossetia quoted by Interfax denied the incident and said he would not believe it until the Georgians showed him the body.
Georgia's interior ministry told AFP the officer died in hospital from wounds to the head and throat after being fired on near Karaleti, a key Russian position on the road from the Georgian city of Gori to South Ossetia.
The Georgian foreign ministry reacted furiously, accusing the Russians of gross ceasefire violations.
Russia's "armed forces not only do not comply with the political commitments undertaken by their president... but go as far as to completely disregard them thus causing the death of innocent people," the ministry said.
Georgia's August 7 offensive to regain control of South Ossetia from Moscow-backed separatists prompted a massive retaliatory thrust by Russia into Georgian territory from which thousands of Russian troops have yet to withdraw.
Russia argues that it repelled Georgian troops to protect thousands of people whom it had granted Russian citizenship since the 1991 collapse of the Soviet Union. The West accuses it of seeking to redraw the map by effectively annexing part of its ex-Soviet neighbour.
Hundreds of people on both sides are estimated to have been killed in the conflict. Tens of thousands fled their homes.
In Moscow on Wednesday, Russia ruled out allowing EU observers into South Ossetia and a second Georgian breakaway region called Abkhazia.
The move directly contradicted claims by Nicolas Sarkozy and threw into doubt a new peace plan the French president had brokered just two days previously with Russian counterpart Dmitry Medvedev.
"Additional international observers will be deployed precisely around South Ossetia and Abkhazia and not inside these republics," Foreign Minister Sergei Lavrov told journalists in Moscow.
Medvedev committed on Monday to withdraw within a month all Russian troops from Georgia apart from the breakaway provinces of South Ossetia and Abkhazia, and to allow the deployment of 200 EU observers.
Sarkozy, speaking at the head of an EU delegation early Tuesday alongside Georgian President Mikheil Saakashvili in Tbilisi, said: "The spirit of the text is that they (the EU observers) will have a mandate to enter (Abkhazia and South Ossetia), to observe, to report."
EU foreign policy chief Javier Solana, also part of the EU delegation, said Wednesday that the location of the observers had not been discussed during talks, but that access to the territories was clearly in the "spirit" of the agreements.
Russia has tightened control over Abkhazia and South Ossetia since the ceasefire, recognising them as independent states, establishing diplomatic relations and vowing to keep 7,600 troops there long-term.
The opening of ties on Tuesday drew a furious response in the Georgian capital Tbilisi where Deputy Foreign Minister Giga Bokeria described it as "yet another step in the annexation of Georgia's sovereign territories."