Russia sent an armored column into the breakaway enclave of South Ossetia after Georgia, a staunch U.S. ally, launched an offensive to crush separatists. Georgia reported early Saturday that warplanes attacked three of its bases and some key oil facilities.
Witnesses said hundreds of civilians have died in the fighting, which threatened to ignite a wider war between Georgia and Russia and escalate tensions between Moscow and Washington.
Georgia said it was forced to launch the assault because of rebel attacks; the separatists alleged Georgia violated a cease-fire.
The South Ossetian capital of Tskhinvali was reportedly devastated. Ossetia spokeswoman Irina Gagloyeva said the city came under prolonged fire during the night "but it was suppressed" by the armed forces, the Interfax news agency quoted her as saying Saturday.
"I saw bodies lying on the streets, around ruined buildings, in cars," said Lyudmila Ostayeva, 50, who had fled with her family to Dzhava, a village near the border with Russia. "It's impossible to count them now. There is hardly a single building left undamaged."
The fighting broke out as much of the world's attention was focused on the start of the Olympic Games and many leaders, including Russia's Prime Minister Vladimir Putin and President Bush, were in Beijing.
The timing suggested Georgian President Mikhail Saakashvili may have been counting on surprise to fulfill his longtime pledge to wrest back control of South Ossetia — a key to his hold on power. The rebels seek to unite with North Ossetia, which is part of Russia.
Saakashvili agreed the timing was not coincidental, but accused Russia of being the aggressor. "Most decision makers have gone for the holidays," he told CNN. "Brilliant moment to attack a small country."
Seeking to prevent an all-out war, diplomats issued a flurry of statements calling on both sides to halt the fighting. The U.N. Security Council held two tense emergency sessions 12 hours apart with both sides using the forum to launch accusations. As the meeting recessed, officials promised a third council session Saturday.
Secretary of State Condoleezza Rice urged Russia to halt aircraft and missile attacks and withdraw combat forces from Georgian territory. Rice said in a statement the United States wants Russia to respect Georgian sovereignty and agree to international mediation.