Only Russia and the ''countries'' of South Ossetia and Abkhazia will decide how many troops Russia can keep on their soil, Russian news agencies quoted Prime Minister Vladimir Putin as saying yesterday, signalling the Kremlin will do as it pleases in the separatist Georgian regions regardless of Western demands.

The statement was in frank defiance of calls by Georgia, the United States and the European Union for a withdrawal of most of the Russian troops from the breakaway territories, which only Russia and Nicaragua have recognised as independent nations.

Thumbing its nose at Georgia and the US, South Ossetia rolled what Russian media said were captured American-made Jeeps and Georgian tanks through the streets of its capital in an Independence Day military parade.

The developments underscored the reality taking shape in the wake of last month's war.

Mr Putin said Russia would adhere to its promise to pull back from the strips of land surrounding South Ossetia and Abkhazia once European Union monitors were deployed, the ITAR-Tass news agency reported. Those areas were Georgian territory, he said.

But any Russian pull-out from South Ossetia and Abkhazia was a ''separate issue'', suggesting Russia's recognition of the separatist regions as independent nations had changed the rules. AP