The European security organisation is warning that the fighting in South Ossestia could escalate into a full-scale war.
Russian forces entered Tskhinvali, the capital of Georgia's breakaway region of South Ossetia, after Georgia announced its troops had seized the town.
Georgia has been fighting separatists with ties to Russia in order to regain control of the province, which has had de facto independence since a war in 1991-92.
The rebels say at least 1400 people have been killed in Tskhinvali, many of them civilians.
OSCE chairman, Finnish foreign minister Alexander Stubb, says such a war would have a devastating impact for the entire region.
NATO and the European Union have called for a halt to the fighting. NATO says it's seriously concerned about the situation.
Georgia has asked reportedly the US military to provide aircraft to move Georgian troops home from Iraq.
The United States has called on Russia to withdraw its combat troops from Georgia and stop air strikes. In a statement on Friday, Secretary of State Condoleezza Rice urged Russia to respect Georgia's territorial integrity.
The White House says President George Bush discussed the situation with Russian Prime Minister Vladimir Putin in Beijing, at the opening of the Olympic Games.
Martial law declaration expected
President Mikheil Saakashvili is expected to declare martial law shortly.
Georgia's Security Council secretary Kakha Lomaia said early on Saturday that Russia has bombed the (Black Sea) port of Poti and a military base at Senaki.