Soldiers guard a Russian army position Friday at the entrance to the town of Gori, Georgia. Tensions continued in the north Georgian city as Russian and Georgian forces negotiated over an end to hostilities that have gripped the country for the last week. (Uriel Sinai/Getty Images)Georgian President Mikhail Saakashvili said Friday he signed a ceasefire agreement with Russia that protects the former Soviet republic's interests despite concessions to Moscow, a deal Russia has reportedly agreed to respect.

The Associated Press, quoting an unidentified U.S. official, said Russia's foreign minister had assured U.S. Secretary of State Condoleezza Rice that his country would implement the deal "faithfully."

The official said Russia was likely to sign the deal Saturday, according to the AP.

Earlier, Rice said only that she had been assured that Russian President Dmitry Medvedev will sign an identical document.

"With this signature by Georgia," Rice said, the Russian pullback "must take place and take place now."

But despite the reported agreement, Russian forces remained camped just 40 kilometres outside the Georgian capital of Tbilisi.

Saakashvili said he will "never ever surrender" in a showdown with Russia, and he accused the West of inviting Russian aggression. He said the West sent a disastrous signal to Russia by denying Georgia a door to NATO membership.

He made his remarks in Tbilisi with Rice standing nearby.

Saakashvili's announcement comes just hours after Medvedev said the Georgian breakaway regions of South Ossetia and Abkhazia are "unlikely to live together with Georgia" after recent conflicts there.

Medvedev spoke to reporters in Moscow earlier Friday, a week after heavy fighting between Russian and Georgian troops broke out over the Moscow-backed breakaway republic of South Ossetia. Russian troops drove Georgian forces out of both South Ossetia and Abkhazia last week.

Bush stands firmly behind Georgia

Displaced Georgian civilians rest just outside the town of Gori on Friday. (Uriel Sinai/Getty Images)Earlier Friday, U.S. President George W. Bush repeated his demand that Russia get out of Georgia, saying the Cold War is over.

"Bullying and intimidation are not acceptable ways to conduct foreign policy in the 21st century," he told reporters at the White House. He said Georgians have cast their lot with the free world and "we will not cast them aside."

The U.S. president said Russia has damaged its relationship with the United States and other countries.

German Chancellor Angela Merkel was also critical of Russia's tactics.

"Some of Russia's actions were not proportionate," Reuters quoted Merkel as saying at a joint news conference with Medvedev. "Russian troops should withdraw from central areas in Georgia."

Her comments carry weight as Germany is Russia's largest trading partner.

Rice says difficult questions can be addressed later

Rice told reporters travelling with her to Tbilisi that the immediate goal is to get Russian combat forces out of Georgia and that more difficult questions can be addressed later.

But she said the U.S. would never ask Georgia to agree to something that isn't in its best interests.

The French-brokered agreement calls for both sides to pull back to positions they held before the fighting started last Friday, when Georgia sent troops to try to retake the separatist province of South Ossetia.

Russia responded to the action by pushing Georgian forces back and advancing far into undisputed Georgian territory. Rice said earlier that the deal would allow Russian peacekeepers stationed in South Ossetia before the conflict began to stay in the region. The troops would also be temporarily allowed to patrol a few kilometres outside the area.

Russia said it is committed to pulling fighting forces out of Georgia, but the Associated Press reported on Friday that Russian troops were still blocking an entrance to the key central Georgian city of Gori.

Abkhazia and South Ossetia, Georgia Russia has said more than 2,000 people, mostly civilians in South Ossetia, as well as 74 of its own soldiers, have been killed in the conflict. Georgia put the figure much lower, at around 175 dead. None of the figures has been independently verified.

While South Ossetia's independence is not recognized internationally, it has close ties with Russia, and almost all of its 70,000 residents have Russian passports.

On Friday, the United Nations High Commissioner for Refugees said the number of people who have been displaced by the fighting in Georgia has risen to more than 118,000. About 73,000 of those are Georgians who have remained in the country, said UNHCR spokesman Ron Redmond.

With files from the Associated Press