Medvedev threatens to hit back if sanctions imposed UPDATE

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MOSCOW (Thomson Financial) - President Dmitry Medvedev warned Sunday that Russia was ready to retaliate against sanctions, on the eve of an EU summit called to address the conflict in Georgia.

In an interview to Russian television, Medvedev said he considered sanctions to be a last resort and argued that such measures need to be encoded in law.

'If needed, we also can adopt such special laws,' he said.

The president spoke on the eve of a European Union summit that is to decide on a response to Russia's military surge in Georgia this month and decision to recognise two Georgian separatist regions as independent states.

Medvedev served notice that he would not reverse his decision to recognise South Ossetia and Abkhazia, despite such calls from the United States.

'I have taken this decision and there is no turning back,' he said.

Russian troops entered Georgia on August 8 to push back a Georgian offensive to retake the rebel enclave of South Ossetia, which broke away from Tbilisi in the 1990s with Moscow's backing.

Russian troops continue to hold positions in western Georgia, serving in what Moscow describes as a peacekeeping mission. Tbilisi has labelled them an occupation force. [e-mail] wj COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.