The deputy chief of staff of Russia's military said in a daily briefing in Moscow that "today, according to the peace plan, the withdrawal of Russian peacekeepers and reinforcements has begun." He added that forces were leaving Gori, which sits on Georgia's main east-west highway.
However, the Associated Press reported that Russian forces appeared to be solidifying their positions around the city.
Russian tanks roamed the roads around Gori and Russian troops were restricting access to the city, according to the AP. The only movement seen by AP reporters was toward the Georgian capital, 50 miles away.
A U.S. official also told the AP, on condition of anonymity, that intelligence showed the Russian military had moved several missile launchers into the breakaway region of South Ossetia, putting them in range of Georgia's capital of Tbilisi.
"The Russians aren't withdrawing; they are in the same places. They are in Senaki, Khashuri, Zugdidi and Gori," Shota Utiashvili, a Georgian Interior Ministry official, told Reuters Monday morning.
Speaking shortly before military's announcement that the withdrawal had begun, Russian President Dmitry Medvedev said: "If anyone thinks that they can kill our citizens and escape unpunished, we will never allow this. If anyone tries this again, we will come out with a crushing response."
"We have all the necessary resources, political, economic and military. If anyone had any illusions about this, they have to abandon them," he added.
Russia mounted its biggest military deployment outside its borders since the collapse of the Soviet Union after Georgia sent a force on August 7 to try to recapture the Moscow-backed province of South Ossetia.
Secretary of State Condoleezza Rice headed to Europe Monday to talk with NATO allies about what message the West should send to Russia about the military intervention.
NATO foreign ministers were expected to review a range of upcoming activities planned with Russia and decide at the meeting whether to cancel any activity.
Russia can't use "disproportionate force" against Georgia and still be welcomed by international institutions, Rice said Sunday. "It's not going to happen that way," she said. "Russia will pay a price."
The 10-day confrontation around South Ossetia killed more than 170 Georgians, dealt a blow to the Georgian military, damaged the country's economy and disrupted transportation routes.
Russia says 1,600 people were killed in the initial Georgian attack on the South Ossetian capital of Tskhinvali, a figure which has not been independently confirmed.
Since relief efforts by the U.S. European Command began last Wednesday, 270,000 pounds of supplies have been flown to Georgia, including blankets, bedding and medical products.
The United Nations said a first aid convoy managed to enter Gori on Sunday and that there were "clear signs of massive looting."