Speaking after talks with German Foreign Minister Frank-Walter Steinmeier in Moscow on Friday, July 18, Lavrov said Berlin's peace plan was "extremely helpful for looking for compromises and a way out of the crisis."

"We believe that the logic of your plan is absolutely the right one," Lavrov told Steinmeier at a joint news conference.

Lavrov's comments seemed to soften his earlier criticism of the German peace proposal which he said was "unrealistic" over the return of Georgian refugees.

"It (the plan) is a step in the right direction," said Lavrov. "There is, however, a problem with wanting to sign at the same time an agreement on not resorting to violence and another on the return of refugees. It is absolutely unrealistic," he said.

Steinmeier traveled to Georgia and its Russian-backed region breakaway region of Abkhazia on Thursday and is in Moscow on Friday to mediate among all sides as tensions simmer between Russia and Georgia.

Three-stage peace blueprint

Georgia's breakaway region of Abkhazia has enjoyed de facto autonomy since the end of a civil war ended in 1994.

But Moscow's recent moves to strengthen diplomatic ties and increase its peacekeeping mission in the region has set off a dangerous row with Tbilisi, who says such steps amount to the creeping annexation of its territory.

Steinmeier, who won support for his plan on Thursday from President Mikhail Saakashvili of Georgia, has said that its main component was restarting direct contact between Tbilisi and the Abkhaz separatists.

The three-phase peace plan, blessed by the so-called United Nations Group of Friends, calls for an end to the violence, confidence-building measures over the next year that could lead to the resumption of direct talks between Georgia and Abkhazia, and the repatriation of about 250,000 Georgian refugees to Abkhazia who fled in the early 1990s during the Soviet Union's breakup.

The second phase would involve developing joint reconstruction projects while the third and most tricky step would be to determine Abkhazia's future status.

Lavrov said earlier it was unlikely Georgia would quickly withdraw its forces from the Kodori gorge, the only part of Abkhazia controlled by Tbilisi.

"We don't see the will," he said as both Moscow and the Abkhazia separatists made the withdrawal a prerequisite for all discussion with the Georgians.

Abkhazian separatists rebuff plan

Earlier Georgia's rebel region of Abkhazia too rejected Steinmeier's peace plan as "unacceptable."

"These offers are unacceptable to us ... We are not prepared to discuss the status of Abkhazia, which is already for many our republic. Abkhazia is an independent state and this not open to discussion," Abkhaz president Sergei Bagapsh said.

"We do not agree with the proposed plan in principle," Bagapsh was quoted by RIA Novosti as saying. "We have proposed that the German foreign minister include in the document two points. The first one: the withdrawal of Georgian troops from upper Kodori Gorge; the second one: signing of a treaty on the non-use of force.

"A return of Georgian refugees (to Abkhazia) would certainly lead to a new war," he added.

Experts say Western intervention a positive sign

This is the first time Germany has taken on a mediatory role in the Caucasus region which is plagued by regional conflicts.

Analysts believe that efforts by western diplomatic to defuse the tensions may not yield immediate results, but they have already changed matters by depriving Russia of exclusive control of the situation.

Europe and the United States attempted to end the dangerous dispute over Georgia's breakaway region of Abkhazia "as tensions reached an extremely high temperature," Archil Gegeshidze, a political analyst at the Georgian Foundation for Strategic and International Studies, told AFP news agency.

"The EU and the United States seek a stable and democratic Georgia" with its oil and gas pipelines connecting the Caspian Sea to Turkey and its strategic location in the eastern edge of the European continent, he added.

As for Russia, which has grown more assertive in recent years, restoring influence in the South Caucasus is largely seen by its political elite as an "existential issue," Gegeshidze said.

The row over Abkhazia and another separatist Georgian region, South Ossetia, is at the heart of increasingly bitter relations between Moscow and Tbilisi, amid Russia's broader offensive against Western influence in its former Soviet backyard.

The increase in tensions has helped Moscow impede its neighbor's bid for membership in the NATO military alliance.

But now the region has seen a flurry of Western diplomatic activity, including visits by US Secretary of State Condoleezza Rice and Steinmeier.

Escalating tensions

Although the self-proclaimed governments of Abkhazia and South Ossetia, which broke away from Tbilisi in the early 1990s, are not formally recognized by any state, Russia tacitly supports the separatists and maintains peacekeeping troops in the two regions.

Tensions mounted further this month after the border between Abkhazia and Georgia was rocked by six explosions, which killed four people including a translator from the United Nations. The Abkhaz leadership blamed the blasts on Georgia, and Moscow's admission that it had sent military jets on flights over South Ossetia.

The incidents raised memories of the two regions' separatist wars in the early 1990s, which killed several thousand people and forced hundreds of thousands to flee their homes.

Steinmeier says peace "a common duty"

"In light of the escalation in the last weeks and months, we all have a common duty to help defuse the situation," German Foreign Minister Steinmeier said on Friday after meeting Abkhaz leader Sergei Bagapsh. .

"The West is giving Georgia a chance to resolve the crisis through a sophisticated diplomatic game," Tornike Sharashenidze, an analyst at the Georgian Institute of Public Affairs, told AFP news agency.

"Georgia now has to demonstrate its ability to follow this process with patience. Otherwise it risks losing Western support," he said.

The German diplomat said all parties to the conflict had an obligation to prevent the crisis from escalating.

"With this goal we have presented a three-phase plan for the settlement of the conflict," Steinmeier was quoted by Interfax as saying. "Both sides' positions are still very far from each other and we need to create the conditions for a dialogue," he added.