By Matthew Collin
BBC News, Tbilisi
South Ossetia says it has evacuated hundreds of women and children
An elderly woman pointed to a hole in her roof which she said was made by a rocket fired by South Ossetian separatist militiamen.
"We know we've been lucky this time," said the woman, Makvala, who lives in Zemo Nikozi, a Georgian-controlled village in the South Ossetian conflict zone.
"This is the second time our house has been hit. It's the worst violence since the civil war."
In the nearby village of Ergneti, 64-year-old Omari said he was lying in bed in the early morning when a rocket struck his house during last weekend's fighting. He rolled up his sleeve to display a wound which he said was caused by flying shrapnel.
"Neither Ossetians nor Georgians want to kill each other," he said. "But someone doesn't want peace and is trying to provoke a war."
South Ossetia, a poor rural province which lies on Georgia's mountainous border with Russia, is a patchwork of ethnic Ossetian and Georgian villages - some of them mixed.
Most of the tiny territory is controlled by the separatists, who receive economic and political support from Moscow, and say they want to join up with North Ossetia inside the Russian Federation. The rest of the region remains under Georgian government rule.
Women and children leave
On the other side of the dividing line, people are also frightened that the situation could escalate into full-blown military conflict.
A young man called Vakhtang, who lives in the separatist capital, Tskhinvali, but took his wife and children across the border to Russia on Wednesday, said people didn't feel safe to walk the streets.
"Tskhinvali feels empty. Almost all women and children were evacuated," he told the BBC.
"Those people who remain hide in cellars or on ground floors of buildings. Every night people feel the worst is going to happen."
This is the most serious fighting in South Ossetia since battles in 2004. Many people in the region also have bitter memories of the civil war in the early 1990s after the fall of the Soviet Union.
The separatist authorities have accused Georgia of preparing to seize back control - and they have vowed to defend themselves.
"We are ready to stop attempts to annex our territory, and we will not only stop them but, should the Georgian side fail to pull out all its armed groups, as we promised before, we will start to clear them out," warned the separatist leader, Eduard Kokoity.
The Georgian President, Mikhail Saakashvili, has said Georgia does not want war. He said confrontation would benefit nobody, and called for direct dialogue.
Georgia accuses Russia
The Georgian Minister for Reintegration, Temur Yakobashvili, said it was the separatists who were trying to drag Georgia into a dangerous new conflict.
Georgia accuses Russian peacekeepers of helping the rebels
He also blamed Russia for equipping and financing separatist forces.
"Russia has to take full responsibility for arming these secessionists, for providing them not only with weapons but money," he said.
"They have to share the blame for shelling civilians and instigating war and instability."
Georgia's pro-Western government believes Russia has been fuelling the separatist conflict in South Ossetia and the country's other breakaway region, Abkhazia, as part of its attempts to stop Georgia joining Nato.
Georgia claims that its former Soviet masters in Moscow are using the separatists as pawns in a much larger political game.
The Kremlin does not want the Western military alliance to extend its reach further into the former Soviet Union.
Tensions have escalated in both South Ossetia and Abkhazia since Nato countries agreed in April that Georgia would, at some unspecified date in the future, become a member.
Russia has peacekeeping troops in the breakaway regions. The separatists see them as a guarantee of their security, but Georgia increasingly views them as an occupying force.
Moscow has also given most people in both regions Russian passports, and has vowed to defend its new citizens if war breaks out - raising fears of a much more deadly confrontation.