Moscow/Tbilisi, Georgia - The war between Russian and Georgia expanded on Saturday morning, with fighting spilling outside the Caucasus province of Ossetia, and both sides moving reinforcements to the region.

The fiercest fighting was in the South Ossetian city of Tskhinvali, where street fighting and artillery exchanges continued sporadically throughout the night.

Intense howitzer and tank fire in the vicinity of the town was audible by mid-morning on Saturday.

Georgian television showed images of hundreds of rockets and heavy artillery shells crashing into Tskhinvali. Shelling reduced entire city blocks to rubble, according to eyewitnesses.

Counts of civilian casualties varied widely, with Georgia estimating between one and two dozen killed, and some 100 injured as of Friday evening.

Eduard Kokoity, South Ossetia's leader, claimed more than 1,400 civilians had died and implied thousands more had been injured.

Eyewitnesses said many victims lost their lives when caught out in the open by artillery fire as they attempted to flee. Georgian television showed images of corpses sprawled along sidewalks and streets, in some cases still holding luggage.

Russian army losses, primarily to a peacekeeping unit stationed in South Ossetia when intense fighting broke out, were admitted at 12 soldiers killed and 22 seriously injured, the Kremlin said.

Georgian military losses were not being reported. Georgian television showed images of a small trickle of Georgian casualties moving to rear areas aboard jeeps and pick up trucks.

Control of Tskhinvali appeared disputed on Saturday, with Georgian officials asserting total control of the city, and Kremlin sources saying Russian peacekeeper infantry - a unit of 2,500 men strong before the fighting began - continued to hold out in Tskhinvali's south.

Refugees were leaving the region and heading north towards the Russian border throughout the night, at times under Georgian artillery fire.

Georgian forces late on Friday ceased fire for some three hours to allow civilians to leave, but according to Russian observers Georgian shelling interdicted roads leading north throughout the night.

Russian airstrikes hit in and outside South Ossetia on Friday, according to Georgian claims, continuing into early Saturday.

Targets bombed or rocketed by fighter aircraft included, reportedly, the Vaziani military base 20 kilometres south-east of the Georgian capital Tbilisi, villages within Ossetia, shore installations in the Black Sea port city Poti, and in the vicinity of a major pipeline shipping oil across Georgia for international markets.

Georgia by Saturday had claimed it had shot down five Russian airplanes, an allegation denied by Russia.

Russia claimed it had destroyed two Georgian aircraft, but there was no independent confirmation.

Russia and Georgia announced halts to civilian air traffic effective Saturday.

Spokesmen for Russia's 58th Army said regular army forces, including two tank columns, had been arriving in the region throughout the night, at times under Georgian artillery fire, and that a counteroffensive to eject Georgian troops from the city was being planned.

"We are preparing to re-establish the peace," said Igor Konashenkov, a Russian army spokesman, according to Interfax.

Any Georgian counter-fire would, according to Konashenkov "be violently suppressed... by Russian artillery and aircraft." He added that Spetsnaz, an elite commando unit, was en route to Ossetia and would arrive "within the next few hours."

Georgia mobilized its reserves on Thursday. Discussions were in progress with the US to bring back to Georgia an elite 1,000-man Georgian infantry battalion currently stationed in Iraq.

International efforts to bring a ceasefire appeared stymied, with the UN's Security Council at loggerheads with the US and Russia taking effectively opposite views over the Ossetia conflict.

US Secretary of State Condoleezza Rice on Friday said Russia should reverse its reinforcements to Ossetia, and withdraw all of its combat forces from Georgian territory.

Russian UN Ambassador Vitaly Churkin rejected the idea, saying Russian forces were fufilling a "perfectly legal" peacekeeping mission, and that the Kremlin's goal was to restore peace to the region.

It was the second failed Security Council session on Ossetia after a first attempt Friday. The Security Council reportedly was planning another emergency meeting on Saturday. (dpa)