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A wounded Russian pilot is carried to a helicopter following a prisoner swap in Igoeti, northwest of the capital Tbilisi, Georgia, on Tuesday. ((Darko Bandic/Associated Press))

NATO allies said Tuesday that the alliance cannot have normal relations with Russia as long as its occupation of Georgia continues, and they called for an immediate withdrawal of troops.

"We have determined that we cannot continue with business as usual," said a declaration released after an emergency meeting of NATO foreign ministers in Belgium.

U.S. Secretary of State Condoleezza Rice and her 25 NATO counterparts, including Canada's Foreign Affairs Minister David Emerson, called on Moscow to immediately honour its pledge to withdraw its troops from the former Soviet republic.

"It is time for the Russian president to keep his word to withdraw Russian forces," Rice told a news conference.

Georgian officials have accused Moscow of ignoring its obligations under a French-brokered agreement that both sides withdraw to positions held before fighting began 11 days ago when Georgian forces moved to retake control of the breakaway province of South Ossetia.

Russia, which had peacekeeping forces in South Ossetia, retaliated by sending in thousands of reinforcements and driving out Georgian forces in the Russian-backed separatist region.

Rice said the alliance sent a message to Russia in Tuesday's declaration that it could not draw new dividing lines in Europe.

Not closing all doors to communication

The move drew swift condemnation from Moscow, where Foreign Minister Sergei Lavrov accused the alliance of bias and wanting to support a "criminal regime" in Georgia.

He said Russian withdrawal depended "first of all, on the return of Georgian troops" to their bases, but added that Moscow had already begun a pullback which he said would take three or four days.

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NATO Secretary General Jaap de Hoop Scheffer said NATO will not cut all communication lines with Russia but won't hold any meetings with it until Russia pulls its troops from Georgia.

"We do certainly not have the intention to close all doors in our communication with Russia," Scheffer said.

Meanwhile, Prime Minister Stephen Harper said Canada will re-examine all aspects of its relationship with Russia, including a joint liquefied natural gas venture discussed at the Group of Eight summit in Russia in 2006.

"We're obviously focusing on aspects that have to do with the strategic and military situation, but we will, of course, review everything," he said in Hamilton, Ont., where he was announcing funds for a new cardiovascular disease research institute.

Western leaders, including Canada's Emerson, have sharply criticized Russia's military response to Georgia's move into South Ossetia as disproportionate.

Observers to be sent to South Ossetia

Earlier in the day, the Organization for Security and Co-operation in Europe (OSCE) said Russia has agreed to a beefed-up monitoring mission for the disputed region of South Ossetia, adding 20 OSCE observers to the current nine. The total could later go up to 100, the OSCE says.

Speaking in Brussels, Finnish Foreign Minister Alexander Stubb, who chairs the OSCE, said Moscow gave its approval Tuesday morning, but the organization is still waiting for a green light from Georgia.

U.S. military officials have said they have seen no significant signs Russia is withdrawing its troops even though Moscow announced Monday that the withdrawal had begun.

In one of the first signs of a withdrawal Tuesday afternoon, a small column of Russian tanks and armoured vehicles was seen leaving the strategic central city of Gori, which sits on Georgia's main east-west road.

Russian military officer, Col. Igor Konoshenkov, said the vehicles are on their way to South Ossetia and ultimately back to Russia.

On Monday, the CBC's Mike Hornbrook talked to several Russian soldiers who said they had not received orders to withdraw from their checkpoint in the Georgian town of Igoeti, about 40 kilometres west of the capital, Tbilisi.

"Nobody has given us that kind of order," one of the soldiers told him. "Besides, we are many soldiers here. It can't all be done at once."

Hornbrook also witnessed a tense standoff between Georgian police and Russian forces at a Georgian checkpoint that ended with a column of Russian tanks ramming through Georgian police cars that had blocked the road.

Russia, Georgia swap prisoners

Meanwhile on Tuesday, Georgia and Russia exchanged 20 prisoners captured during the brief conflict in an effort to reduce tensions.

"It went smoothly," said Georgian Security Council head Alexander Lomaia told reporters in Igoeti, where 15 prisoners were exchanged.

Lamaia said the swap, initially planned for Monday, removed any pretext for Russians to hold their positions in the village of Igoeti, the closest Russian forces have gotten to the Georgian capital, Tbilisi.

But later in the day, the Associated Press reported that Russian soldiers had taken about 20 Georgian troops prisoner at a key Black Sea port in western Georgia and were holding them at gunpoint.

They also had reportedly commandeered American Humvees awaiting shipment back to the U.S. A Pentagon spokesman said officials were looking into the reported theft.

The United Nations estimates the fighting has displaced more than 158,000 people.

Georgia is a nation of about 4.5 million people in the Caucasus region, bordered by Russia, Turkey, Armenia, Azerbaijan and the Black Sea. It regained its independence following the collapse of the Soviet Union in 1991.

South Ossetia broke away from Georgia in the early 1990s, but was never recognized by the international community.

With files from the Associated Press