US President George W Bush has demanded a Russian ceasefire and a peaceful end to conflict in Georgia. Pro-Western Georgia came into direct conflict with Russia over South Ossetia last week after launching an offensive to regain control over the pro-Moscow breakaway separatist region. Mr Bush demanded Russia end its armed conflict with Georgia and accused the Kremlin of trying to topple Georgia's leadership. "Russia has invaded a sovereign neighbouring state and threatens a democratic government elected by its people. Such an action is unacceptable in the 21st century," he said. And he warned a "dramatic and brutal escalation" of Russia's push into Georgia would jeopardise relations with the West. Georgia hosts a key oil pipeline supplying the West and the fighting has unsettled oil markets. It has alarmed investors in Russia and has raised fears of a wider conflagration in the volatile region bordering Iran, Turkey and Russia. Asked what would happen if Moscow ignored Mr Bush's appeal, US Ambassador to the United Nations, Zalmay Khalilzad, said: "There is of course a variety of other measures, political or economic." Moscow has snubbed Western pleas for a ceasefire and Prime Minister Vladimir Putin, taking a leading role in the crisis, has accused Georgia of sparking the crisis. "The Cold War has long ended but the mentality of the Cold War has stayed firmly in the minds of several US diplomats. It is a real shame," Mr Putin said.