The Authorities of Georgia herein declare that it is necessary to take timely and efficient steps aimed at comprehensive and peaceful settlement of the conflict. People of South Ossetia need to open a new stage of development, stability and dignified coexistence.

I. Bases of the Peace Agreement

1. A long history of living together for centuries and successful coexistence of the Georgian and Ossetian peoples in the common cultural, territorial and economic space;
2. Striving for peace, welfare and stable economic prosperity of the Georgian and Ossetian people. Ensuring new, firm and legal principles of development of tourism, trade, agriculture and industry;
3. Providing the people living in South Ossetia with new broad possibilities of social protection, education, health protection, legal economic activity, job places and self-realization;
4. Creation of common legal and law-enforcement space, improvement of criminal situation, elimination of organized crime, including illegal trade in weapons, traffic of narcotics and smuggling. Protection of population from the threat of terrorism and influence of uncontrolled criminal groups;
5. Restoration and protection of norms, prescribed by the international law. Reintegration of South Ossetia with the legal system.

II. Terms of the Peace Agreement

1. Both parties to the conflict shall unconditionally refuse to use force;
2. The Authorities of Georgia shall completely assume social obligations to the population of South Ossetia;
3. The Law on Property Restitution shall be put into effect with respect to the population, who suffered damages in the conflict of 1990-1992; all families, who suffered losses, shall be paid single financial compensation;
4. The Government of Georgia expresses its readiness to provide the population of South Ossetia with a single payment of arrears of their pensions, accrued since 1991 and also guarantees all inhabitants that their current pensions and social privileges will remain at the least the same level;
5. The basic term of the Peace Agreement consists in unconditional protection of principles of self-determination of nations, cultural identity, minority rights, human rights and freedoms and equality of citizens, stipulated by the Constitution of Georgia.

III. Territory

The territory of South Ossetia shall be restored within the same borders fixed before the commencement of the conflict and shall include the regions of Tskhinvali, Java, Znauri and Akhalgori.

IV. Political Status

South Ossetia represents an autonomous entity within the territory of Georgia.
South Ossetia is governed by the Head of South Ossetia, elected in the territory of South Ossetia through universal, equal and direct elections by secret ballot.
South Ossetia has its Parliament, elected through free and direct elections.
The Authorities of Georgia provide the population of South Ossetia with broad rights of local self-government. The population of South Ossetia shall elect the leadership and administration of Sakrebulos (self-governing bodies) of regions, towns and villages.
The representation of South Ossetia shall be ensured at all branches of the Georgian government that implies broad representation of Ossetian nationality citizens at the Georgian ministries, departments, committees and other offices of the state.
The representation of South Ossetia shall be ensured at the Parliament of Georgia that implies representation of definite number of deputies from the autonomous entity of South Ossetia.
Participation of representatives of South Ossetia in the administration of justice at the constitutional and other courts shall be also ensured.

V. Language and Education

In the territory of South Ossetia the Ossetian language, along with the state language, shall enjoy the status of an official language.
Education in the Ossetian language shall be guaranteed and the government of South Ossetia shall settle the issues pertaining to the education.
Financing of the Ossetian television, radio and mass media shall be ensured from the state budget of Georgia.
Financing of the measures for protection of Ossetian culture and history shall be ensured from the state budget of Georgia.

VI. Social and Economic Rehabilitation

The Authorities of Georgia shall ensure the economic rehabilitation of South Ossetia and shall allocate relevant sums from the state budget of Georgia for rehabilitation of vitally important infrastructure that implies restoration of motor roads, railways, power transmission lines, gas main, the means of communications (telephone lines, cellular communication), TV and radio broadcasting.
The Government of Georgia shall support the implementation of target programs of economic revival, the aim of which consists in development of small and middle-sized business and creation of sustainable local sources of employment and income.
The fund for economic support of South Ossetia shall be established. Its financing shall be carried out through the state budget of Georgia and donations from international donors as well. Management of the fund and establishment of the priorities shall be implemented jointly by the central and South Ossetian authorities, with the participation of representatives of the international organizations.
The Government of Georgia is ready to consider the issue of creation of special economic zone in the territory of South Ossetia.

VII. Legal Issues

A three-year transitional period in the process of conflict resolution shall be announced.
Supervision over the progress of the transitional period shall be exercised by international organizations.
Joint Georgian-Ossetian police/militia acting in the transitional stage under the aegis of international organizations shall be established.
The police/militia shall insure the security of citizens and freedom of their movement.
The joint committee shall be set up for the purpose of investigating the war crime cases. The joint committee shall make decisions on the fate of the criminals.
The Government of Georgia shall ensure the establishment of simplified border regime for the local population on the South Ossetian section of Georgian-Russian border which entails free movement of the South Ossetian population to and fro North Ossetia.
The Government of Georgia shall ensure repatriation of all inhabitants, who left Georgia during the conflict.
The Government of Georgia shall provide people, who decided to repatriate, with financial aid necessary for their settlement.