GORI, (Georgia) - SEPARATIST fighters and Russian troops looted and set homes ablaze in Georgian territory on Wednesday amid fears over a fragile ceasefire that ended five days of bitter conflict.

Despite a French-brokered truce agreed on Tuesday by the leaders of the two countries, Russia faced mounting criticism in the West.

Russian armoured vehicles patrolled the flashpoint town of Gori and about 60 tanks, armoured personnel carriers and other vehicles were seen on the road from Gori to the Georgian capital, 75 kilometers (45 miles) away.

An AFP reporter saw Russian troops shouting: 'Tbilisi, Tbilisi'.

A day after President Dmitry Medvedev halted the Russian military offensive, in response to Georgia's attack on breakaway South Ossetia, the Russian military denied it had any forces in Gori, which is between Ossetia and the Georgian capital.

Hundreds of South Ossetian rebels with some Russian army personnel went house-to-house in villages near Gori. They set houses ablaze and looted buildings.

The body of a man, apparently a civilian, his mouth caked with blood, lay in a street in the village of Dzardzanis and nearby the body of a bearded man could be seen crushed under an overturned mini-van.

Russia and Georgia agreed a ceasefire on Tuesday after French President Nicolas Sarkozy held talks with their leaders.

Both sides accused each other of violating the truce.

'Russian tanks have moved into Gori,' said Georgia's President Mikheil Saakashvili.

'They have destroyed buildings, there has been looting by Russian troops. They were shooting people.'

Russia denied having military forces in Gori. 'Neither Russian peacekeepers nor any units subordinate to them are present in Gori,' Russian news agencies quoted a military spokesman as saying earlier.

Russia accused Georgia of failing to pursue an 'active withdrawal' from South Ossetia.

'Georgian forces have begun their pull-back toward Tbilisi but no active withdrawal has yet been observed,' General Anatoly Nogovitsyn, deputy chief of the staff of the armed forces, told reporters.

Russian Foreign Minister Sergei Lavrov warned that Russia would withdraw from Georgian territory only after Georgian troops have returned to their barracks.

The United States, Georgia's main Western ally, cancelled joint military exercises with Russia due to start this week and is considering other protest measures, US officials said.

A senior US defense official said the August 15-23 exercises involving Russian, French, British and US warships in the Sea of Japan 'have been scrapped'.

'In the wake of this conflict, there is no way that we can proceed with this joint exercise at this time,' the official said.

US Secretary of State Condoleezza Rice said: 'I can assure you that Russia's international reputation and what role Russia can play in the international community is very much at stake here.'

EU foreign ministers reviewed the crisis at a meeting in Brussels.

Britain's Foreign Secretary David Miliband said the European Union should reassess relations with Russia.

'The aggressive Russian force beyond South Ossetian borders has been something that really shocked many people,' he said.

'The sight of Russian tanks in Gori, Russian tanks in Senaki, Russian blockade of Poti, the Georgian port are a chilling reminder of times that I think we had hoped had gone by.'

The ceasefire was agreed after French President Nicolas Sarkozy held talks in Moscow and Tbilisi. French Foreign Minister Bernard Kouchner raised the possibility of sending European 'monitors' to Georgia, but did not speak of a peacekeeping force.

Russian troops and tanks poured into Georgia on Friday after the Georgian army launched an offensive to regain control of South Ossetia, a Moscow-backed region which broke from Tbilisi in the early 1990s.

There was considerable scepticism among Russian newspapers about whether the conflict was really over.

Even as Mr Medvedev announced an end to the Russian operation 'it immediately became clear that in fact the confrontation was hardly finished,' wrote the daily Kommersant.

'It is too early to reach unequivocal conclusions about whether the agreement reached by (President Dmitry) Medvedev and Sarkozy will really put an end to military actions in South Ossetia,' wrote the popular daily Komsomolskaya Pravda.

'Saakashvili is characterised by his unpredictability and a lack of willingness to respect agreements,' it added.

Georgia took Russia before the International Court of Justice (ICJ) for 'alleged acts of ethnic cleansing' between 1993 and 2008, starting with the period when Russian peacekeepers entered Georgia's breakaway regions.

Russia claims the conflict has left more than 2,000 civilians dead, while the United Nations estimates some 100,000 people have been forced from their homes.

The Georgian health minister put the death toll in Georgia at 175 people, mainly civilians. Russia said that 74 of its troops had been killed. -- AFP