UPDATE 2-Cautious China "concerned" over Georgia

(Adds Central Asia summit, paragraphs 6-7)

By Chris Buckley

BEIJING, Aug 28 (Reuters) - In the uproar over Russia's fight with Georgia, China has stood out by its reticence, seeking to protect ties with Moscow while voicing concern about a territorial break-up that could set a precedent it fears.

Western powers have warned Russia to leave all Georgian territory. China has confined itself to calls for a peaceful resolution to the crisis, which erupted earlier this month when Russia launched an overwhelming counter-attack after Georgia tried to retake its breakaway province of South Ossetia.

But after Moscow recognised South Ossetia and a second disputed region, Abkhazia, as independent, China said on Thursday it was "concerned".

"We understand the complex history and realities of South Ossetia and Abkhazia," Chinese Foreign Ministry spokesman Qin Gang told reporters, repeating an earlier written statement.

"Reflecting China's consistent stance on such issues, we hope all the parties can appropriately resolve the issue through dialogue and consultation."

Beijing and other members of the Shanghai Cooperation Organisation, a central Asian security group, also urged a peaceful resolution at a summit in Tajikistan on Thursday, but failed to explicitly back Russia on the issue.

The leaders of China, Russia and four ex-Soviet states, Tajikistan, Kazakhstan, Uzbekistan and Kyrgyzstan, backed a six-point ceasefire deal brokered by French President Nicolas Sarkozy, and merely acknowledged Russia's role in the Caucasus.