GENEVA, Dec 18 (Reuters) - Georgia and Russia have agreed to work to prevent or resolve security incidents in or around the breakaway South Ossetia region over which they fought a war in August, international mediators said on Thursday.

Two days of talks failed to agree a text on how to deal with security and refugees in the region, but the discussions took place in a positive spirit and made progress on 8 out of 10 issues, they told a joint news conference.

Discussions focused on proposals for joint mechanisms to prevent and investigate security incidents which continue almost daily after their five-day war, they said.

"Participants agreed on principle in broad terms on participants in the mechanisms and on their implementation ... and on the subjects to be covered. Only a few items of difference remain," Pierre Morel, special representative of the European Union (EU), told reporters at the end of two-day talks.

"But despite last minute talks, we were unable to reach agreement today," he added.

"Our work is advancing and will continue ... a common working spirit has now been established and we will pursue our efforts."

It was the third monthly round of high-level talks hosted in the Swiss city by the EU, United Nations and Organisation for Security and Cooperation in Europe (OSCE) since October.

Russia sent troops into its small, ex-Soviet neighbour after Georgian government forces tried to take South Ossetia, which had thrown off Georgian rule in 1991-92.

Georgia's First Deputy Foreign Minister Giga Bokeria and Russian Deputy Foreign Minister Grigory Karasin led their respective delegations to the talks. The United States, which sees Georgia as an ally in the Caucasus, sent a senior envoy.

Representatives of the Moscow-backed regions of South Ossetia and Abkhazia, another breakaway Georgian region, also took part in the talks, held as working group sessions on security and refugee issues.

Johan Verbeke, special envoy of U.N. Security-General Ban Ki-moon and head of the U.N. observer mission in Georgia, said the latest talks, unlike the previous two rounds, had not been dogged by procedural questions about whether representatives from the breakaway regions could take part.

Besides agreeing on the need for a mechanism to prevent and resolve security incidents, participants had agreed on the issues that needed to be resolved to set it up, he added.

"We did have an agreement in principle on the necessity and opportunity of having a mechanism in the first place," he said.

Morel said the next round of talks would take place in Geneva on Feb. 17 and 18 next year.

At the weekend, Russian troops reoccupied the Georgia border village of Perevi, a mountain village on a road into South Ossetia from the west, forcing back Georgian police and drawing criticism from EU monitors of the fragile ceasefire.

Russia has recognised South Ossetia as an independent state with Russian military protection. (Reporting by Stephanie Nebehay; editing by Jonathan Lynn)

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