(adds proposed new mission to be run by Vienna-based OSCE envoy)

By Mark Heinrich

VIENNA, Dec 19 (Reuters) - Russia has demanded that the OSCE divide its operations in Georgia to reflect the "independence" of separatist South Ossetia if it wants to extend its monitoring mission beyond Dec. 31, diplomats said on Friday.

The United States and European allies in the 56-nation Organisation for Security and Cooperation in Europe have not recognised South Ossetian independence. Moscow did so after Russian forces foiled a Georgian attempt to wrest back control of the breakaway region last August.

"Russia doesn't want the OSCE's Georgia mission to have any say or responsibility over activities in South Ossetia to underline that 'facts on the ground' have changed," said an OSCE diplomat who requested anonymity due to political sensitivities.

"The Russians know like most others in the OSCE that its position will not fly, but they are determined to pull the plug on any mandate for South Ossetia" cast within a Georgian umbrella, he told Reuters.

Russia has prevented OSCE observers from returning to South Ossetia, despite pledging under a ceasefire to let them back in. It says South Ossetian authorities should decide -- a firewall since most countries do not recognise them.

Finland, current chairman of the Vienna-based OSCE, this week circulated a proposal for a one-year renewal of its Georgia mandate that made clear the country was regarded as one whole.

The confidential draft, obtained by Reuters, said the mission would be run by a special OSCE envoy who would be able to cross military lines at will and seek full implementation of ceasefire terms, promote reconciliation and return of refugees.

But a Russian-amended version deleted passages referring to the envoy and "the OSCE mission to Georgia" and added passages to suggest Georgia no longer had sovereignty over South Ossetia.

Finnish Foreign Minister Alexander Stubb said any future for Europe's biggest security and human rights watchdog in Georgia was now in danger because the required 56-nation consensus remained elusive with the mandate soon to expire.

He urged OSCE members to "constructively consider our proposal ... or at least agree on a three-month technical extension to allow further negotiations".

An emergency meeting of the OSCE's Preparatory Committee was scheduled for Monday in Vienna to tackle possible solutions.

Georgian Foreign Minister Grigol Vashadze ruled out a separate OSCE mandate for rebel South Ossetia.

Russian officials were unavailable for comment.

South Ossetia is an historically pro-Russian autonomous territory that threw off direct rule from Tbilisi after Georgia became independent in the Soviet Union's 1991 breakup.

The row over Georgia has done much to sink relations between Russia and the United States to a post-Cold War low. (Additional reporting by Conor Sweeney in Moscow, Matt Robinson in Tbilisi and Tamo Virki in Helsinki; editing by Elizabeth Piper)

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