The breakaway republic will next year receive $400 million from Russia in reconstruction aid. Provincial capital Tskhinvali has been left in ruins by Georgia's military offensive, while Russia says more than 2,000 civilians have been killed, and over 34,000 have fled.
"Russia's government has urgently earmarked more than $200 million to prevent the humanitarian catastrophe from worsening," Dmitry Rogozin told a briefing.
Russia's finance minister had earlier said urgent humanitarian aid could be added to reconstruction allocations, which will be taken from Russia's 2009 budget.
"We have reserved 10 billion for 2009. But of course reconstruction should be started this year. Whether it will take a billion, two, or three will be determined, and then we will make adjustments in the 2008 budget," Alexei Kudrin said.
Most of South Ossetia's 80,000 residents are Russian citizens.
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Any response would likely boomerang on Russia – the partnership between Rosneft and ExxonMobil is a case in point. The United States has hit Russia with a third round of sanctions. This time the Americans went with a higher caliber weapon, targeting Russia’s biggest energy companies (Rosneft and Novatek) and banks (VEB and Gazprombank).