"I beg you [South Ossetians] to cease fire immediately. We have no wish to wage war against you. Don't try the patience of our country. Let's stop this escalation and start talks - direct, multilateral, any kind of talks," Saakashvili said in a televised address.
Sporadic shelling and skirmishes in and around the South Ossetian capital of Tskhinvali have continued throughout the week. Six South Ossetians were killed and another 15 wounded in a Georgian attack on the night of August 2. Tskhinvali said 18 people were wounded in heavy shelling last night.
Georgia has also accused South Ossetia of attacks of border villages. (IMAGE GALLERIES)
"Let's give peace and dialogue a chance," said Saakashvili.
Saakashvili also invited Russia to play a key role in mediating peace between Georgia and South Ossetia.
"We need true mediators, and I invite Russia again to play a key role in [the Georgian-South Ossetian] conflict resolution," the Georgian president said, describing his country as Russia's natural ally.
"Any Georgian president...will always have to maintain good relations with Russia, provided Russia respects the country's sovereignty and territorial integrity," Saakashvili said.
Alexander Lomaya, who heads the Georgian National Security Council, said Saakashvili had also issued instructions for the country's armed forces not to return fire if they came under attack from South Ossetian forces.
"The decision was made despite the fact that a Georgian peacekeeper was recently killed during an escalation of violence in the conflict zone," Lomaya said.
A spokesman for the Georgian reintegration minister said on Thursday evening that a peacekeeper was killed and another four soldiers injured in an attack on a Georgian peacekeeping unit in the village of Avnevi, not far from the republic's capital of Tskhinvali.
Two people were also killed on Thursday as Georgia shelled the South Ossetian village of Tsunar, near Tskhinvali, a police officer said.
Lomaya failed to confirm however whether Tbilisi was deploying troops and military hardware in the conflict zone, saying only that Georgia was seeking a peaceful settlement.
After a meeting with the Russian peacekeeping commander, General Marat Kulakhmetov, in Tskhinvali earlier in the day, Georgian Reintegration Minister Temur Yakobashvili reiterated that Georgia would like to avoid military clashes.
"We will temporarily and unilaterally cease fire in the conflict zone. This is our last attempt to avoid large-scale military operations," the minister said, without disclosing a timeframe for the ceasefire.
The minister confirmed Georgia's readiness to hold talks with South Ossetia.
Yury Popov, the Russian Foreign Ministry's envoy and a co-chairman of the Joint Control Commission (JCC), who visited Tskhinvali on Thursday, announced that Russia would mediate a meeting on Friday afternoon between Georgia's Yakobashvili and South Ossetia's Deputy Prime Minister Boris Chochiyev.
Arrangements have been made to hold the meeting at peacekeepers' headquarters in Tskhinvali.
South Ossetia and another Georgian breakaway republic, Abkhazia, broke away from Georgia following the collapse of the Soviet Union in 1991, gaining de facto independence after bloody conflicts with Tbilisi.
Georgia has pledged to bring the two tiny republics back under central control and has accused Russia of trying to annex the regions.
NATO and the EU Council of Ministers have called on all the sides in the conflict to avoid the use of force, to calm tensions, and seek a peaceful solution through negotiations.
