Russia faced diplomatic isolation over its military action against Georgia, with its Asian allies failing to offer support and France saying EU leaders were considering imposing sanctions.

Moscow accused the West of heightening tension by a naval build-up in the Black Sea, and said talk of punishing Russia for recognising the independence of two breakaway Georgian regions was the product of a "sick" and "confused" imagination.

The Group of Seven rich nations condemned Moscow's "continued occupation of Georgia" and a group of Asian allies led by China, meeting in the Tajik capital Dushanbe, failed to follow Russia's lead on independence for two breakaway regions of Georgia.

The crisis flared early this month when Georgia tried to retake by force its separatist province of South Ossetia and Russia launched an overwhelming counter-attack.

Russian forces swept the Georgian army out of the rebel region and are still occupying some areas of Georgia proper. On Tuesday Moscow announced that it was recognising South Ossetia and another breakaway region, Abkhazia, as independent states.

France, the current European Union president, has called a meeting of EU heads of government on Monday (Sept 1) to discuss the Georgian crisis.

"Sanctions are being considered and many other means as well," French Foreign Minister Bernard Kouchner said in response to a question at a news conference.

"We are trying to elaborate a strong text that will show our determination not to accept (what is happening in Georgia)," he said. "Of course, there are also sanctions."    

Russian Foreign Minister Sergei Lavrov dismissed such talk, noting that Kouchner had also suggested recently that Russia might soon attack Moldova, Ukraine and the Crimea.

"But that is a sick imagination, and probably that applies to sanctions as well. I think it is a demonstration of complete confusion," Lavrov told reporters in Dushanbe.

The United States and Europe demand Russia respect a French-brokered ceasefire and withdraw all its troops from Georgia, including a disputed buffer zone imposed by Moscow.

Analysts see Moscow's actions as a bid to halt expanding Western influence in the Caucasus, a major oil and gas transit route from the Caspian Sea to the West that bypasses Russia.

As the diplomatic manoeuvring gathered pace, Moscow also expressed alarm at a naval build-up in the Black Sea, an area normally dominated by its southern fleet.

Two US warships are already off the coast of Georgia to show support for their ally and Washington has ordered the flagship of its Sixth Fleet, the sophisticated joint command ship Mount Whitney, to the area, saying it will deliver humanitarian supplies.

"The appearance of Nato battleships here in the Black Sea basin ... and the decision to deliver humanitarian aid (to Georgia) using Nato battleships is something that can hardly be explained," Prime Minister Vladimir Putin's chief spokesman said in a teleconference with correspondents.

"Let us hope ... that we do not see any direct confrontation."    

Nato insists the only Black Sea presence under the auspices of the Western military alliance is a group of four warships -- one Spanish, one German, one Polish and one American -- which are on a long-planned routine exercise.

"There is certainly no Nato build-up in the Black Sea", Commander Kevan McHale at Nato's Supreme Headquarters Allied Powers Europe (SHAPE) said. Notification of transit through the Turkish Straits was given in June, Nato said later.

Russia's deputy chief of the General Staff, Colonel-General Anatoly Nogovitsyn, has spoken of up to 18 Nato vessels being in or expected in the Black Sea. Russia responded by sending the flagship of its Black Sea fleet, the guided-missile cruiser Moskva, to the Abkhaz port of Sukhumi, less than 200 km (120 miles) to the north of where the two US warships are sailing.

In Tbilisi, Georgians buried their war dead and prayed for their country on a religious holiday. The remains of 10 of the 263 soldiers killed in the conflict were lowered into a single grave on a hill overlooking the capital, after a haunting funeral march played by a military band.

"I don't know which one is my son," cried an elderly woman holding a photograph of a man in military uniform. "We've been waiting for him for two weeks."    

Though it easily won the war, Russia has struggled to win diplomatic support for its actions in Georgia, which have been condemned by the United States and European powers.

Russian President Dmitry Medvedev failed to secure support for his action at a summit of the Shanghai Cooperation Organisation (SCO), a group linking Moscow with China and four ex-Soviet Central Asian states.

"The SCO states express grave concern in connection with the recent tensions around the South Ossetian issue and urge the sides to solve existing problems peacefully, through dialogue, and to make efforts facilitating reconciliation and talks," the summit's closing statement in Dushanbe said.

Even China, which often sides with Russia in diplomatic disputes, issued a veiled criticism of Moscow's actions, saying it was "concerned about the latest changes in South Ossetia and Abkhazia" and calling for dialogue to resolve the issue.

Kazakhstan, a Central Asian oil and gas powerhouse normally close to Moscow, said it was too early to consider recognition. -Reuters