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Aug. 8 (Bloomberg) -- Russian Prime Minister Vladimir Putin said ``war has started'' over the breakaway region of South Ossetia as Georgian President Mikheil Saakashvili accused its neighbor of a ``well-planned invasion.''

Saakashvili said in a Bloomberg Television interview that his nation of 4.6 million people is ``fighting to secure its borders'' amid a ``full-blown military aggression'' involving thousands of Russian troops. Aerial bombings and widespread fighting in and around the region killed an unknown number of civilians and wounded ``scores'' more, Saakashvili said.

Putin earlier today told George W. Bush in Beijing that ``volunteers'' were pouring over the border to help defend South Ossetia from Georgian forces, according to Putin spokesman Dmitry Peskov.

``War started today in South Ossetia'' when Georgia attacked Russian peacekeepers in the disputed region, Putin said. The Defense Ministry later said it deployed ``reinforcements.''

The ruble dropped the most against the dollar in 8 1/2 years and Russian stocks tumbled today on concern the conflict will worsen. The U.S., U.K., European Union and NATO, which Georgia is seeking to join, all called on both sides to end hostilities.

South Ossetia, which has a population of about 70,000 and is less than half the size of Kosovo, broke away from U.S.-backed Georgia in the early 1990s and now is a de facto independent state with Russian peacekeepers and economic support.

Fighting escalated throughout the day, with Russian planes dropping four bombs on the Vaziani military base, which the North Atlantic Treaty Organization uses for training, Georgian Security Council chief Kakha Lomaia said by phone. The base is about 15 kilometers from the Georgian capital.

Georgian forces have shot down three Russian planes since the fighting began, Lomaia said. Russia earlier bombed two Georgian towns, Gori and Kareli, he said.

Russia's Defense Ministry denied losing aircraft and declined to comment on the bombing report.

``We will not allow the death of our compatriots to go unpunished,'' Russian President Dmitry Medvedev, 42, told state television after the Interfax news service said Russian troops were killed in Georgian shelling of a barracks and checkpoint. ``The guilty will get the punishment they deserve.''

Saakashvili, 40, said Russia amassed troops for months on its northern border before hostilities began. The Russian government earlier denied bombing Gori, Stalin's birthplace, and Kareli, and accused Georgia of ``unleashing a dirty, reckless scheme.''

``There are so many claims and counter-claims that it's impossible to know who started it,'' said James Nixey, manager of the Russia and Eurasia Program at the Royal Institute of International Affairs, a research institute based in London. ``Both sides have been antagonistic and easy to antagonize. It's a cold war that's suddenly gotten very hot.''

Georgia last month increased the size of its military to 37,000 soldiers and today Saakashvili called up reservists and urged the nation to defend ``every meter'' of land. Russia has a standing army of about 1.1 million.

Russian television showed tanks heading over the border to South Ossetia from the Russian region of North Ossetia at about 3:30 p.m. Moscow time. Interfax reported at about the same time that Russian warplanes were bombing Georgian targets.



``Fighting continues,'' Russian Major General Marat Kulakhmetov, commander of Russia's peacekeeping forces in South Ossetia, said by mobile phone. The peacekeepers have suffered casualties, although it's too early to say how many, he said.

Georgia is a key link in a U.S.-backed ``southern energy corridor'' that links the Caspian Sea region with world markets, bypassing Russia, the world's biggest energy producer. Two pipelines pass through the country linking Azerbaijan and Turkey.

The BP Plc-led Baku-Tbilisi-Ceyhan oil pipeline, which has been closed since Aug. 5 due to an explosion in Turkey, runs about 100 kilometers south of the South Ossetian capital of Tskhinvali.

The most recent violence in the region erupted on Aug. 1, when South Ossetia said Georgian shelling of the regional capital Tskhinvali claimed six lives. Georgia said South Ossetian forces sparked the fighting.

``The conflict might be short and hot, but my sense is that neither party wants a prolonged conflict,'' said Michael Denison, associate fellow at London-based research group Chatham House and a professor of international security at the University of Leeds.

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