Brussels:  Nato downgraded ties with Russia to protest the invasion of Georgia, struggling to go beyond verbal condemnation of Russia's first foreign military campaign since the collapse of the Soviet Union.

"There can be no business as usual with Russia under present circumstances," Secretary General Jaap de Hoop Scheffer told reporters after allied foreign ministers met in Brussels on Tuesday. He ruled out Nato-Russia meetings "as long as Russian forces are basically occupying a large part of Georgia."

Allied and Georgian officials disputed Russian accounts that a retreat is under way. Georgia said Russia strengthened its grip on the Black Sea port of Poti, while North Atlantic Treaty Organization officials detected only initial signs of troop movements.

No 'New Line'

Nato temporarily halted meetings of the Nato-Russia Council, a body set up in 2002 to promote cooperation among the now 26 allies and Russia.

"Nato is not going to permit a new line to be drawn in Europe, a line between those who were fortunate enough to make it into the trans-Atlantic structures and those who still aspire to the trans-Atlantic structures," said US Secretary of State Condoleezza Rice, who called the emergency Nato meeting.

De Hoop Scheffer also called it "pathetic" that Russian officials have again threatened to target a Nato member, Poland, with ballistic missiles in response to US plans to set up an anti-missile base there.

Rice plans to sign the basing agreement in Warsaw on Wednesday, foreseeing the stationing of 10 interceptor rockets in Poland to guard against attacks by "rogue" states such as Iran.

Nato insisted that Russia abide by the terms of an August 16 cease-fire and pull combat troops back behind the pre-conflict lines, saying it can maintain only its previous "peacekeeping" force in South Ossetia, the breakaway Georgian region it seized during the five-day war that began August 8.