Georgian officials tonight claimed the country had been 'overrun' by Russian troops after a full-scale ground invasion.
Amid reports that Moscow forces had taken the town of Gori - and were marching on the capital Tsblisi - Georgian soldiers appeared to be in full retreat.
Troops were apparently in complete chaos as a full-scale rout pushed them back through the countryside.
Meanwhile, the civilian crisis intensified with thousands of refugees fleeing the seemingly unstoppable advance of the Russian army.
Earlier in the day, Russian premier Vladimir Putin raised the stakes over the conflict by lashing out at the U.S. as the fighting continued to escalate in the region.
The Russian prime minister rejected calls from Georgia for a ceasefire and declared that his country would pursue its mission to its 'logical conclusion'.
A day after a face-to-face meeting with President George W. Bush in Beijing who expressed 'grave concern', Mr Putin accused the U.S. of siding with Georgia by ferrying Georgian troops from Iraq to the battle zone.
'It is a shame that some of our partners are not helping us but, essentially, are hindering us,' said Mr Putin. 'The very scale of this cynicism is astonishing.'