(Releads with Russian, Georgian Olympic officials)

By Douglas Hamilton and Karolos Grohmann

BEIJING, Aug 9 (Reuters) - Heavy fighting in the breakaway Georgia enclave of South Ossetia has alarmed Russian and Georgian athletes at the Olympic Games in China and dampened spirits on the first day of competition, team officials said on Saturday. Both teams were anxiously monitoring news reports of the conflict, which escalated dramatically late on Thursday.

"Our athletes are doing what they've prepared for for years. There's no politics," said Russian Olympic Committee spokesman Gennady Shvets. But the fighting was obviously very serious and team members were upset by news reports of up to 1,500 dead.

The Georgia team's marketing consultant, Peter Tsanava, said he did not think there was any "mood against Russia or Russian against Georgian" among the two teams.

"But it is a terrible situation when you hear there is bombing going on in your country, and it is a tiny country. Georgians and Russians are both worried," he told Reuters.

"I live in Moscow but my family is in Georgia right now and i am worried. I hope everything gets better quickly."

Shvets and a handful of journalists and officials in the Russian Olympic committee office watched the morning TV news from Moscow showing scenes of destruction in South Ossetia, including tanks smashed by artillery and injured civilians in hospitals.

"This is unbelievable," said one.

Shvets said Georgian President Mikheil Saakashvili, who is backed by Washington, "is stupid, a criminal, mentally ill. He should go to a clinic". Moscow blames Saakashvili for the upsurge in fighting over what for years had been a "frozen conflict".

"Normally during the Olympics countries try to calm down any conflicts they have," Shvets added.

CONTRARY TO OLYMPIC SPIRIT

The International Olympic Committee in Beijing said it was saddened by the escalation of a conflict.

Russia and Georgia blamed each other for the fighting in the pro-Moscow enclave, which broke from Georgia as the Soviet Union split apart in the 1990s but has no international recognition.

"It is not what the world wants to see. It is contrary to what the Olympic ideal stands for," IOC spokeswoman Giselle Davies told reporters, hours after the Games opening ceremony attended by Russian Prime Minister Vladimir Putin.

IOC President Jacques Rogge met Putin on Friday but the issue of the conflict was not discussed, Davies said.

The battles that have moved to the enclave's capital have also sparked concerns regarding the preparations for the 2014 Winter Olympics in Sochi, a few hundred kilometres from Georgia's western border.

The Russian Black Sea resort Sochi has to build 80 percent of the venues in less than six years and the IOC warned this week that preparations needed to become more efficient.

Davies said it was still to early to assess any effect on the Sochi Games preparations.

"The sad reality is that there are a number of countries (at the Olympics) that are in conflict," she said. "It would be wrong to make an assessment here and now for an event that is several years away." (Editing by Alex Richardson) (For more stories visit our multimedia website "2008 Summer Olympics" at http://www.reuters.com/news/sports/2008olympics; and see our blog at http://blogs.reuters.com/china)

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