The Russian army on Thursday announced plans to hand over control of the central Georgian city of Gori to the Georgian police in a step away from escalation of the South Ossetia conflict.

Russian troops were moving north Thursday morning and the handover would take place Friday, Russian General Viacheslav Borisov said, according to a report from Russia's Interfax news agency.

The troops had orders to collect weapons, ammunition as well as military equipment left behind by the Georgian army, he said.

Borisov made the announcement after late-night meetings in Gori with Georgia's national security minister, Aleksander Lomaia.

According to media reports, the situation in Gori, which is located 60 kilometres north of Tblisi, has calmed down. Georgian security forces were enforcing law and order, local police chief Alexander Maisuradse was quoted as saying.

Residents who had fled the city, the birthplace of Soviet dictator Josef Stalin, could return as of Thursday afternoon, he added. Earlier reports about pillaging Russian soldiers rampaging through the city were denied by Russia.

"The situation in Gori is more or less calm," Lomaia said on Georgian television.

Georgia's chief human rights official, Sosar Subaria, announced an investigation into reports of "paramilitary groups" killing and kidnapping people in Gori.

Borisov's troops, acting on apparent Kremlin orders, broke a ceasefire Wednesday, advancing from South Ossetia, a separatist region in north-central Georgia, past Gori to destroy Georgian military installations.

Washington announced it would send US Air Force and Navy elements to Georgia to deliver "humanitarian aid."

Russian media has routinely called the infantry and armored personnel carrier spearheads "peacekeepers."