French Foreign Minister Bernard Kouchner, heading a EU delegation to the Georgian capital, told the BBC that President Mikhail Saakashvili signed a document outlining proposals for a ceasefire, controlled withdrawals of troops on both sides and eventual political talks.
The delegation would now go to Moscow, Mr Kouchner said, to convince President Dmitry Medvedev to back the EU plan.
Bernard Kouchner travelled to Gori to see the effects of the conflict
Reports from the Russian capital suggested the Kremlin had quickly rejected the draft plan, saying Georgia was continuing to use military force.
Mr Medvedev later proposed that a delegation from the Organisation for Security and Co-operation in Europe (OSCE), which has been mediating the dispute, should be sent to South Ossetia.
He had earlier accused Georgia of "genocide" in the region, but said Russian troops were now in control of Tskhinvali and Moscow's military push was "largely complete".
Russian Prime Minister Vladimir Putin also spoke out, criticising the US for transporting Georgian troops from Iraq to redeploy to the conflict at home.
OSCE head Alexander Stubb, accompanying Mr Kouchner, said he could not predict when the conflict would end, saying only that he was "optimistic" a cessation of violence could begin "in the next few days".
Fighting over South Ossetia erupted late last week when Georgia launched an overnight assault on the territory, which has had de facto independence since the end of a war in 1992.
Russia, which supports the breakaway province, hit back, bombing targets throughout Georgia.
The latest reports of violence came despite Georgia saying on Sunday that it would observe a ceasefire. Moscow has insisted Georgian forces withdraw fully from South Ossetia before it halts operations.
From Tbilisi, Georgia said up to 50 Russian fighter jets attacked targets inside Georgia overnight, with targets including a missile base and a radar station.
Georgia said the town of Gori, close to the South Ossetian border and used as a jumping-off point for Georgia's push into South Ossetia, was also attacked during the night.
Elsewhere in Georgia, tensions were rising in Abkhazia, another region within Georgia with secessionist ambitions.
Broke away from Georgia in 1992-1993 war
De-facto independence not recognised internationally
2,000 Russian troops there sent as peacekeepers
Georgia seized strategic Kodori Gorge in Abkhazia in 2006
Abkhazia rejected Georgian offer of autonomy within federal state
Reports said a Russian general issued an ultimatum to Georgian forces to pull out of Abkhazia's Kodori Gorge or Russia would send in its troops. Earlier, reports in Moscow said 9,000 Russian troops were being deployed to Abkhazia.
On Sunday, separatist leaders in Abkhazia announced a full mobilisation in order to drive Georgian troops from part of the region, and gave them a deadline to leave.
Georgia has accused Russia of landing 4,000 more troops in Abkhazia via the Black Sea. The separatists said Georgia had deployed a similar number of soldiers south of the Abkhaz border.
ARMED FORCES COMPARED
Total personnel: 26,900
Main battle tanks (T-72): 82
Armoured personnel carriers: 139
Combat aircraft (Su-25): Seven
Heavy artillery pieces (including Grad rocket launchers): 95
Overnight, US President George W Bush was strongly critical of Russia's military strikes against Georgia.
Speaking in Beijing, US President Bush told NBC TV that he had spoken frankly to Mr Putin when the pair met at the opening ceremony of the Olympic Games last week.
"I said this violence is unacceptable," Mr Bush said, adding: "I was very firm with Vladimir Putin. Hopefully this will get resolved peacefully."
In a telephone call to President Saakashvili, US Vice-President Dick Cheney said Russian aggression "must not go unanswered".
But White House officials refused to speculate on what the US might do if the Russian military action continued.
The United Nations refugee agency (UNHCR) has called on the parties to the conflict to grant safe passage to civilians trying to escape the war zone - estimated at up to 20,000 within Georgia, with some 30,000 fleeing into the Russian province of North Ossetia.
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