Tbilisi and Kremlin agree to end hostilities over South Ossetia in deal brokered by French leader Nicolas Sarkozy

The Russian president, Dmitry Medvedev, has signed a ceasfire pact brokered by the French to end hostilities in Georgia.

George Bush today said the development was "a hopeful step," but added: "Now Russia needs to honour the agreement and withdraw its forces and of course end military operations."

Foreign secretary David Miliband welcomed the declaration but added that Russian "aggression" against Georgia and threats to neighbouring states, such as Poland, were unacceptable.

The Russians had been refusing to pull back their forces in Georgia until Georgian president Mikheil Saakashvili signed the six-point ceasefire plan arranged by President Nicolas Sarkozy of France earlier this week -although they had refused to sign it themselves.

Saakashvili reluctantly signed the plan yesterday – which calls for Russian troops to pull back but also grants them limited patrols inside Georgia, while accusing the Russians of being "evil" and "21st century barbarians".

Kremlin sources have now confirmed that Russia has signed the pact.

"The president informed participants of the security council meeting that

he had just now signed the six-point plan," said the Kremlin's chief

spokeswoman, Natalia Timakova.

Under the plan, some emotive issues remain open to interpretation – including whether Georgia is able to send troops back into areas of South Ossetia.

The ceasefire agreement should prompt international talks to define the status of South Ossetia and Abkhazia.

Meanwhile, the risk of a new era of east-west confrontation triggered by Russia's invasion of Georgia heightened yesterday when Moscow reserved the right to launch a nuclear attack on Poland because it agreed to host US rockets as part of the Pentagon's missile shield.

Miliband welcomed Medvedev's signing of the peace plan and said the priority was to ensure that commitments made in the agreement were "speedily and fully implemented".

Earlier, Washington accused Russia of "bullying and intimidation" in Georgia, Russia's deputy chief of staff turned on Warsaw and said it was vulnerable to a Russian rocket attack because of Thursday's pact with the US on the missile defence project.

"By deploying, Poland is exposing itself to a strike - 100%," warned Colonel General Anatoly Nogovitsyn. He added that Russia's security doctrine allowed it to use nuclear weapons against an active ally of a nuclear power such as America.

The warning worsened the already dismal mood in relations between Moscow and the west caused by the shock of post-Soviet Russia's first invasion of a foreign country.

There were scant signs of military activity on the ground in Georgia, but nor were there any signs of the Russian withdrawal pledged on Tuesday under ceasefire terms mediated by the European Union.

Instead, the focus was on a flurry of diplomatic activity that exposed acute differences on how Washington and Berlin see the crisis in the Caucasus.

Condoleezza Rice, the US secretary of state, went to Tbilisi to bolster Georgia against the Russians as President George Bush denounced Russian "bullying and intimidation" as "unacceptable".

Angela Merkel, the German chancellor, met Russia's President Dmitry Medvedev on the Black Sea close to Georgia's borders and sent quite a different message, offering a mild rebuke of Moscow.

"Some of Russia's actions were not proportionate," she said.

Unlike the Americans and some European states who are saying the Russians should face "consequences" for their invasion, Merkel said negotiations with Moscow on a whole range of issues would continue as before and spread the blame for the conflict. "It is rare that all the blame is on one side. In fact, both sides are probably to blame. That is very important to understand," she said.

In Tbilisi, Rice was much more forthright, saying that the invasion had "profound implications for Russia ... This calls into question what role Russia really plans to play in international politics.

"You can't be a responsible member of institutions which are democratic and underscore democratic values and on the other hand act in this way against one of your neighbours."

Saakashvili said: "Russia has every time been testing the reaction of the west. It's going to replicate what happened in Georgia elsewhere," said Saakashvili. "We are looking evil directly in the eye. Today this evil is very strong, and very dangerous for everybody, not just for us."

Rice's show of solidarity with Georgia's beleaguered president was theatrically undermined when Russia dispatched a column of armoured personnel carriers towards the Georgian capital.

As the talks were taking place, 10 armoured personnel carriers laden with Russian troops set off from Gori, penetrating to within 20 miles of Tbilisi.

"Georgia has been attacked. Russian forces need to leave Georgia at once," said Rice. The withdrawal "must take place, and take place now ... This is no longer 1968," she added in reference to the Soviet invasion of Czechoslovakia 40 years ago next week.

The ceasefire terms favour the Russians who routed the Georgians. But the secretary of state argued the plan would not affect negotiations over the central territorial dispute between Georgia and the two breakaway pro-Russian provinces of Abkhazia and South Ossetia. The deal allows Russian troops to remain in the two provinces and to mount patrols and "take additional security measures" on Georgian territory beyond the two enclaves.

Senior Russians continued to insist yesterday that Russian troops had not stepped outside South Ossetia and Abkhazia despite the fact they have been deep inside Georgian territory in several places all week.

"Our ground forces never crossed the border of the conflict zone," said Sergei Ivanov, the deputy prime minister.

Moscow also indicated it would resist possible European attempts to deploy international peacekeepers in the contested territories.

"We are not against international peacekeepers," the Russian president said. "But the problem is that the Abkhazians and the Ossetians do not trust anyone except Russian peacekeepers." He also attacked the agreement between Washington and Warsaw on the missile shield and said claims that the shield was aimed at Iran were "fairy tales"

"This clearly demonstrates the deployment of new anti-missile forces in Europe has as its aim the Russian Federation," said Medvedev. "The moment has been well chosen."

The timing of Thursday's agreement on missile defence means that tensions are soaring on Russia's southern and western borders.

Polish armed forces yesterday paraded in Warsaw to mark a rare defeat of the Russians 888 years ago and President Lech Kaczynski hailed the accord on the Pentagon project as a boost for Poland's security.

In return for hosting 10 interceptor rockets said to be intended to destroy any eventual ballistic missile attacks from Iran, Poland is to receive a battery of US Patriot missiles for its air defences and has won a mutual security pact with Washington.