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Despite fears of possible violence, the official said the pullout was on track.
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He said the pullout would be clearly visible in satellite images.
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Defence Minister Anatoly Serdyukov said the pullout would be complete by tomorrow evening.
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The Israeli army declined immediate comment, but Israeli radio stations said the pullout was complete.
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The radio said the pullout proposed by Prime Minister Benjamin Netanyahu was approved by 10 votes to seven.
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He said the pullout of some 200 OSCE personnel, who promote democratisation and civic rights, would take several months.
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Marat Kulakhmetov, commander of Russian peacekeeping forces in the Georgia-South Ossetia conflict zone, said the pullout would be completed in daylight hours.
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French leader Nicolas Sarkozy quoted Medvedev as saying the pullout would begin at midday Monday but the Kremlin has not confirmed a specific time.