By Christian Lowe
MOSCOW (Reuters) - Russia and Georgia on Friday denied anewspaper report that they were discussing a plan to resolvetheir conflict over the breakaway Abkhazia region by splittingit into two spheres of influence.
Abkhazia is recognised as part of Georgia but it is run byseparatists with support from Moscow. Friction between theex-Soviet neighbours over the region has alarmed Western statesworried about a conflagration near a vital oil export route.
Russia's Kommersant newspaper said on Friday Georgia wasoffering to accept the separatists' de facto control and thepresence of Russian peacekeepers in the northern part ofAbkhazia, including the capital, Sukhumi.
In exchange, Tbilisi wanted Russian peacekeepers towithdraw from the Gali and Ochamchira districts in the south ofAbkhazia and for ethnic Georgians -- who used to be in amajority in the two districts -- to be allowed to return, thenewspaper said.
Russian Foreign Minister Sergei Lavrov later said it was"absolutely untrue" that discussions on such a proposal wereunderway, Russian news agencies reported.
In Tbilisi, Georgian President Mikheil Saakashvili said thenewspaper report was untrue.
"We are not going to give up anything to anyone," he saidat a news briefing. "We have peaceful plans which envisagecreating a free economic zone in Gali and Ochamchira and are atthe initial stage."
Saakashvili has proposed a peace deal under which Tbilisiwould retain sovereignty over the region but the Abkhaz wouldenjoy a large degree of autonomy.
WINTER OLYMPIC THREAT
Since the start of this year, Russia has establishedsemi-official links to the separatists and sent in extratroops.
Aspiring NATO member Georgia accused Russia of trying toannex the region sandwiched between the Black Sea and theCaucasus mountains.
Tbilisi's Western allies warned Moscow it was stokingtensions in a part of the world that is emerging as a majortransit route for oil exports.
A BP-led pipeline pumps about 1 million barrels a day ofCaspian Sea crude through Georgia to the Turkish Mediterraneanport of Ceyhan.
Georgian forces were driven out of Abkhazia in a separatistwar in the early 1990s. Western diplomats say the stand-off hasbecome so tense that for a time this year there was a realdanger of a resumption of hostilities.
In one incident, the United Nations said a Russian airforce jet shot down an unmanned Georgian spy plane overAbkhazia, though Moscow denied involvement.
Some observers say if no solution is found, the conflictcould jeopardise the 2014 Winter Olympics which Russia ishosting just a few kilometres from the border with Abkhazia.
(Additional reporting by Margarita Antidze in Tbilisi;writing by Christian Lowe; editing by Stephen Weeks)
