Seven Russian peacekeepers were killed and seven others wounded when a car filled with explosives blew up near their base in Georgia's breakaway region of South Ossetia on Friday, Russian news agencies reported.
Russia's Defence Ministry described the blast as a "terrorist act" aimed at undermining international efforts to restore peace in the region, scene of a five-day war between Tbilisi and Moscow in August.
The South Ossetian leader pointed the finger at Tbilisi. But Georgia denied responsibility.
"Seven servicemen died, another seven were wounded," Interfax news agency quoted the peacekeepers' commander, Major-General Marat Kulakhmetov, as saying.
RIA news agency quoted Kulakhmetov as saying that the peacekeepers, which control the region and a swathe of Georgian territory outside it, had detained two cars in the Georgian village of Ditsa.
"There were four people, apparently ethnic Georgians, in the car. Light firearms and two grenades were also found," Kukakhmetov said.
"The cars and the detained people were escorted to (South Ossetian capital) Tskhinvali," he added. "During the search of one of the cars, an explosive device equivalent to some 20 kg (50 lb) of TNT went off."
Thick black smoke plumed into the air after the explosion. Police cars and ambulances rushed to the scene.
"Russia's Defence Ministry views the incident as a deliberately planned terrorist act aimed at preventing the sides from carrying out the Medvedev-Sarkozy plan," the ministry said in a statement.
Months of skirmishes between separatists and Georgian troops erupted into war in August when Georgia sent troops and tanks to retake the pro-Russian region of South Ossetia, which threw off Tbilisi's rule in the early 1990s.
Russian forces subsequently drove Georgian government troops out of South Ossetia. Moscow's troops then pushed further into Georgia, saying they needed to prevent further Georgian attacks.
The West has condemned Russia for a "disproportionate response" to Georgia's actions and demanded that Moscow pull back its troops from Georgian territory outside the conflict zones.
Under a plan mediated by French President Nicolas Sarkozy, EU monitors have now entered a Russian-controlled buffer zone around South Ossetia to begin a peacekeeping operation.
Russia says confiscating illegal weapons and explosives was part of the work carried out by its troops.
The Defence Ministry statement did not specify who exactly was behind the blast. But South Ossetian leader Eduard Kokoity blamed Georgian security services.
"This was a deliberate act by the Georgian security services," Itar-Tass news agency quoted him as saying. "The (Russian) military and people who bought the car in Georgia and delivered it to Tskhinvali for checks, died in the blast."
The Georgian Interior Ministry denied the charges.
"If provocations and tensions are in the interest of anyone, it's the Russians," ministry spokesman Shota Utiashvili told Reuters. "They are doing everything not to pull out troops within the set term."Reuse content