Ossetian militiamen drive a tank in the city of Akhalgori in August 2008 © AFP/File Olivier Laban-Mattei

"The South Ossetian militia have left Perevi," Sarkozy announced at a press conference following a meeting here on the global financial crisis of leaders from the world's 20 richest nations.

The French leader, who as the current head of the European Union mediated between Russia and Georgia during their conflict in August, said the withdrawal from Perevi was a sign of renewed cooperation with Russian President Dmitry Medvedev.

"This reassures me that Medvedev is a partner with whom we must maintain a dialogue," he said.

Perevi, a mainly ethnic Georgian village of about 1,100 people on the western border of South Ossetia, had been under Russian control since August.

Nicolas Sarkozy © AFP Nicholas Kamm

But the Russian military withdrew from Perevi after 50 armed South Ossetian militiamen entered the village, Georgian officials said.

There were no reports of violence, but Georgian officials feared locals would flee the area and called on European Union ceasefire monitors for help.

Russian forces moved into Georgia on August 8 to repel a Georgian military attempt to retake South Ossetia, which has received extensive backing from Moscow.

Under an EU-brokered ceasefire, Russian forces later withdrew to within South Ossetia and another rebel Georgian region, Abkhazia, which Moscow has recognized as independent states.

But Tbilisi had accused Russia of not respecting the ceasefire by keeping forces in Perevi and in the disputed Akhalgori district, an area that was under Georgian control before the war.