"The situation is, on the whole, stabilizing, and nearly all the refugees have returned to the republic," Vladimir Putin said during a teleconference with officials responsible for dealing with the aftermath of the Georgian attack, adding that some 2,000 people had yet to return home.
Some 36,000 people fled South Ossetia during the recent five-day war between Russia and Georgia.
Georgian forces attacked South Ossetia on August 8, triggering a Russian operation to "force Georgia to peace." Most residents of South Ossetia and another breakaway region, Abkhazia, have Russian citizenship. Russia recognized South Ossetia and Abkhazia on August 26.
Putin said those affected by the fighting would receive aid payments, adding that communications, electricity, gas, and water supplies had been restored in Tskhinvali, the capital of South Ossetia.
The Russian premier said Russia was ready, if necessary, to expand transport links with the republic.
"If the Roksky tunnel is not enough... it will be necessary to think about expanding transport possibilities and establishing additional links between South Ossetia and Russia," Putin told Russian Transportation Minister Igor Levitin.
The Roksky tunnel is the only highway that directly links Russia and South Ossetia.
Abkhazia and South Ossetia broke away from Georgia following the collapse of the Soviet Union in the early 1990s amid bloody conflicts which claimed thousands of lives.
