ANKARA, August 8, 2008 (AFP) - Turkey on Friday urged an end to hostilities in neighbouring Georgia's breakaway province of South Ossetia, calling for dialogue to resolve the escalating conflict.

Turkey 'calls on the parties to stop military action and negotiate directly with each other,' a foreign ministry statement said.

The 'grave' developments in South Ossetia represent 'a conflict environment that could threaten regional peace and security,' the statement said.

Georgian forces surrounded and shelled the capital of the Russian-backed province on Friday, drawing warnings of retaliation from Russia which supports the separatist administration.

Turkey has developed close ties with Georgia, its northeastern neighbour, since the Caucasian republic gained independence following the collapse of the Soviet Union, and supports the country's bid to join NATO.