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Pro-Russian rebels in eastern Ukraine rebels have pulled back to the main city of Donetsk, abandoning several strongholds in the Donetsk region to government forces.

Separatists abandoned the cities of Sloviansk and Kramatorsk, as well as some smaller towns, in the north of Donetsk region.

However, they have vowed to continue the fight from Donetsk city, describing the withdrawal as a tactical retreat.

Ukrainian forces launched an offensive this week after a truce broke down.

Ukrainian rebels abandoned several strongholds in the Donetsk region to government forces

Ukrainian rebels abandoned several strongholds in the Donetsk region to government forces

The government said in a statement that the rebels had fled after mortar shelling from government forces.

Ukraine’s newly-elected President Petro Poroshenko said the breakthrough was “the beginning of the turning point in the fight against militants”.

“This is not complete victory. But the cleansing of Sloviansk from gangs who are armed to the teeth is of huge symbolic importance,” he said in a statement.

Some rebels were initially quoted as saying they were heading to the nearby city of Kramatorsk.

It later emerged that the pro-Russian fighters had also abandoned their posts there, and were apparently heading south to the regional capital.

Alexander Borodai, prime minister of the self-proclaimed Donetsk People’s Republic (DPR), said the rebels had abandoned the entire “northern sector”.

The pro-Russian authorities in Donetsk city said rebel fighters had begun to arrive from the north, and urged residents to stay in their homes.

Rebel leaders were quoted as saying the decision to abandon Sloviansk was taken by Igor Strelkov, the military commander of the DPR.

Igor Strelkov, whose real name is Igor Girkin, had pleaded for Russian intervention on Friday saying his men had lost the will to fight.

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Ukraine’s newly appointed Defense Minister Valeriy Heletey has promised that the army would retake Crimea, restoring the country’s territorial integrity.

Addressing parliament in Kiev, Valeriy Heletey said: “There will be a victory parade… in Ukraine’s Sevastopol.”

Russia annexed Crimea – which has a Russian-speaking majority – in March after a controversial referendum.

In eastern Ukraine, a government offensive against pro-Russian separatists is continuing.

Lt. Gen. Valeriy Heletey was approved by Ukraine’s parliament as new defense minister after being recommended by President Petro Poroshenko

Lt. Gen. Valeriy Heletey was approved by Ukraine’s parliament as new defense minister after being recommended by President Petro Poroshenko

German Chancellor Angela Merkel and French President Francois Hollande have urged Russian President Vladimir Putin in a conference call to use his influence to put pressure on the rebels in the Donetsk and Luhansk regions.

Vladimir Putin said he was “deeply concerned about the rise in deaths among the civilian population and sharp increase in refugees” entering Russia from south-eastern Ukraine, according to the Kremlin.

All three leaders agreed that the Organization for Security and Co-operation in Europe (OSCE) should play a more active part in monitoring the situation in the conflict zone.

Ukrainian President Petro Poroshenko later said he was ready to return to a ceasefire provided it was observed by both sides, all hostages were freed and borders secured by government forces.

His statement came after he spoke on the phone with US Vice-President Joe Biden. Petro Poroshenko called off a unilateral truce on June 30, accusing the rebels of staging deadly attacks on Ukrainian government troops.

Lt. Gen. Valeriy Heletey, 46, was approved by Ukraine’s parliament after being recommended by Petro Poroshenko as someone who would work day and night to restore the military capability of the country’s armed forces.

His remark about Sevastopol was applauded by the chamber.

The status of Sevastopol, home port of Russia’s Black Sea Fleet for centuries, was disputed by Russia long before it annexed Crimea.

A new chief of the general staff, Viktor Muzhenko, was also appointed on Thursday.

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At least nine civilians are reportedly killed in an attack on a village in the Luhansk region of eastern Ukraine.

Pro-Russian rebels have accused the Ukrainian army of shelling and bombing the village of Luhanska.

But Ukrainian officials said their forces were not in the area, blaming the rebels themselves.

Hundreds of people have been killed since a pro-Russian rebellion began in eastern Ukraine. A shaky ceasefire ended on Monday.

President Petro Poroshenko had called the 10-day unilateral ceasefire, which rebel leaders later joined, but ended it as both sides accused each other of violations.

Diplomatic moves to renew the truce were stepped up on Wednesday as the German foreign minister hosted talks in Berlin with his Ukrainian, Russian and French counterparts.

Pro-Russian rebels have accused the Ukrainian army of shelling and bombing the village of Luhanska

Pro-Russian rebels have accused the Ukrainian army of shelling and bombing the village of Luhanska (photo AFP)

Five soldiers were killed and 28 wounded in rebel attacks in Donetsk region on Tuesday, the government said.

The civilian deaths came in the early hours of Wednesday, when several buildings were reportedly hit in the village of Luhanska.

Amateur videos were posted on YouTube showing ruined buildings and bodies on a street. Neither the reports of casualties nor the videos could be verified independently.

According to the rebel leadership in Luhansk, government forces attacked the village with artillery and from the air, killing 10 people on a single street. The situation was the same in another village, Nova Kondrashivka, a statement said, although there was no confirmation.

However, Ukrainian security forces in the region were quoted by Interfax news agency as saying the rebels had attacked the village themselves, at around 04:00 local time, causing deaths and damage.

While there had been artillery shelling in the area, it was “completely in the opposition direction”.

Ukrainian officials said on Facebook that no air force planes had been operating there at the time, although that statement was disputed by someone claiming to be a witness.

The rebels in Donetsk said separately that two of their fighters had been killed in fighting on Wednesday at Nikolayevka. They also reported that three members of the same family had been killed in the Kramatorsk-Sloviansk area (Donetsk) by government shelling.

Troops stationed above the rebel stronghold of Sloviansk fought off rebel attempts to break out of the encirclement, the government said, but lost one soldier killed and 10 wounded.

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Ukraine’s forces and pro-Russian militants in the east have agreed to extend their week-long ceasefire by 72 hours.

President Petro Poroshenko is hoping for progress on his peace plan.

The announcement came hours after Petro Poroshenko had signed a landmark EU trade pact – the issue that has been the trigger of the recent crisis.

The deadline for the ceasefire to expire was Friday at 22:00.

Separatists in the east held talks on Friday with mediators, including Ukraine’s former President Leonid Kuchma, Moscow’s ambassador in Ukraine and the Organization for Security and Co-operation in Europe (OSCE).

Ukraine's forces and pro-Russian militants in the east have agreed to extend their week-long ceasefire by 72 hours

Ukraine’s forces and pro-Russian militants in the east have agreed to extend their week-long ceasefire by 72 hours (photo AP)

The leader of the self-declared “Donetsk People’s Republic” in the east, Alexander Borodai, said the new truce would be observed until June 30.

Petro Poroshenko met officials to discuss the truce after returning from Brussels.

A statement was later posted on the Ukrainian presidential website confirming the truce until 22:00 on Monday.

The statement pointed to a policy statement on Ukraine, issued by the European Council on Friday which set out key steps it expected to happen by Monday.

They include the return of three key checkpoints to Ukrainian forces and the “launch of substantial negotiations on the implementation of President Poroshenko’s peace plan”.

Russian Foreign Minister Sergei Lavrov earlier said he would welcome an extension, but not if it were simply an ultimatum for separatists to lay down their arms.

Russian President Vladimir Putin has insisted on a long-term ceasefire to allow for negotiations between the Ukrainian government and separatists, urging Petro Poroshenko to embark on a “path of peace, dialogue and accord”.

Petro Poroshenko set out a 15-point peace plan on 20 June. It involves decentralizing power and holding early local and parliamentary elections.

It also proposes the creation of a six-mile buffer zone on the Ukrainian-Russian border, and a safe corridor for pro-Russian separatists to leave the conflict areas.

Fighting is said to have continued in some areas of eastern Ukraine despite the ceasefire.

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Ex-USSR states Ukraine, Georgia and Moldova have signed partnership agreements with the EU, in a move strongly opposed by Russia.

The pact – which would bind the three countries more closely to the West both economically and politically – is at the heart of the crisis in Ukraine.

Russia said that while the signing of the deal was the right of any state there could be grave consequences.

A ceasefire with pro-Russian rebels in east Ukraine is due to end on Friday.

Ukrainian President Petro Poroshenko hailed the signing as Ukraine’s most historic day since independence in 1991, describing it as a “symbol of faith and unbreakable will”.

Ukrainian President Petro Poroshenko hailed the signing of the partnership agreement with the EU

Ukrainian President Petro Poroshenko hailed the signing of the partnership agreement with the EU (photo Reuters)

Petro Poroshenko also said he saw the signing as the start of preparations for joining the bloc.

“Ukraine is underlining its sovereign choice in favor of membership of the EU,” he said.

Meanwhile European Council President Herman van Rompuy described it as a “great day for Europe”.

“The EU stands by your side, today more than ever before,” he told leaders of the three countries, adding that there was nothing in the agreements that might harm Russia in any way.

Meanwhile, Russian Deputy Foreign Minister Grigory Karasin told Interfax news agency that the move was fraught with difficulties.

“The signing of this serious document is, certainly, a sovereign right of each state,” he said.

“[But] the consequences of the signing by Ukraine and Moldova no doubt, will be serious.”

Earlier senior Kremlin adviser Sergei Glazyev described Petro Poroshenko as a “Nazi” and said his presidency was illegitimate because parts of Ukraine did not vote in the May elections.

Sergei Glazyev also said that Petro Poroshenko had no constitutional right to sign the treaty, which would damage the Ukrainian economy.

However, President Vladimir Putin’s spokesman Dmitry Peskov told Russian media that Sergei Glazyev’s comments did not reflect the official Kremlin position.

Petro Poroshenko’s predecessor Viktor Yanukovych refused to sign the deal under pressure from Russia and protests led to his overthrow.

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President Barack Obama has urged Russian President Vladimir Putin to stop the flow of weapons into Ukraine and halt support for separatists.

The White House said that in the phone call Barack Obama warned of further sanctions if Moscow failed to act.

The Kremlin says Vladimir Putin urged direct talks between Kiev and the rebels in the east. Russia denies arming them.

The separatists have said they will observe a truce initiated by Ukrainian President Petro Poroshenko.

President Barack Obama has urged Russian President Vladimir Putin to stop the flow of weapons into Ukraine and halt support for separatists

President Barack Obama has urged Russian President Vladimir Putin to stop the flow of weapons into Ukraine and halt support for separatists

The week-long ceasefire – part of a 15-point peace plan announced by Petro Poroshenko last week – is due to expire on Friday.

Late on Monday, White House spokesman Josh Earnest told reporters: “The president spoke to President Putin and once again urged him to support peace instead of allowing the provision of arms and materiel across the border and continuing support for militants and separatists who are further destabilizing the situation in Ukraine.”

“Russia will face additional costs if we do not see concrete actions to de-escalate the situation,” he said.

The US and EU have already imposed a number of sanctions, including visa bans and asset freezes on Russian officials, after Moscow annexed the Ukrainian region of Crimea in March.

Washington said last week that a number of Russian tanks and armored personnel carriers had crossed the border into the east of Ukraine.

The Russian government has strenuously denied that any of its tanks crossed the border into Ukraine.

On Monday, the US State Department said Washington also had new information that tanks were being readied at a site in south-western Russia to be sent into Ukraine.

As diplomatic efforts to ease the crisis continued, Vice President Joe Biden spoke to Ukraine’s President Petro Poroshenko in a phone call on Monday, telling him that the US would continue to strongly support his peace plan, the White House said.

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Pro-Russian rebels in eastern Ukraine have announced that they will observe a ceasefire until Friday morning, responding to the Ukrainian forces’ unilateral ceasefire.

The rebel announcement was made in Donetsk by Alexander Borodai, a leader of the self-styled “Donetsk People’s Republic” which is defying Kiev.

On June 20, Ukrainian President Petro Poroshenko announced a 15-point peace plan and declared a week-long truce.

Alexander Borodai is known as one of the leaders of the self-proclaimed Donetsk People's Republic

Alexander Borodai is known as one of the leaders of the self-proclaimed Donetsk People’s Republic

Alexander Borodai was speaking after attending preliminary peace talks in Donetsk.

The high-level talks also involved representatives of the other breakaway region – Luhansk – and Viktor Medvedchuk, an opponent of the Kiev authorities who is close to Russian President Vladimir Putin.

Russia’s Ambassador Mikhail Zurabov was also there, along with former Ukrainian President Leonid Kuchma, who is seen as a mediator for President Poroshenko. European mediators from the OSCE security organization also participated.

Last week President Putin cautiously welcomed the Kiev ceasefire. The plan involves decentralizing power, holding early elections, and creating a 6-mile buffer zone on the Ukrainian-Russian border.

The rebels say they will not disarm until Ukrainian government troops have left the east. The militants still control key government buildings across Donetsk and Luhansk regions.

“The ceasefire will take effect as announced earlier – until 10:00 on June 27,” Alexander Borodai said, referring to President Poroshenko’s declaration on Friday.

“During that time there will be ceasefire monitoring by Russia and the OSCE.

“We hope that during the ceasefire both sides will manage to reach agreement and start consultations on how to proceed with talks and a peace settlement.”

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President Vladimir Putin has announced that he supports a peace plan tabled by Ukraine – as long as it includes “practical action” to start talks.

The Russian president said Kiev must negotiate and make compromises with pro-Russian rebels for the plan to be “viable and realistic”.

Vladimir Putin also said a week-long truce – declared by Ukrainian President Petro Poroshenko – must not be used as an “ultimatum”.

Clashes have continued in eastern Ukraine, with rebel attacks overnight injuring six border guards.

President Vladimir Putin said Kiev must negotiate and make compromises with pro-Russian rebels

President Vladimir Putin said Kiev must negotiate and make compromises with pro-Russian rebels

The separatist fighters have dismissed the truce, accusing the Ukrainian army of violating their own ceasefire.

Meanwhile, the US has imposed sanctions – including asset freezes – against seven pro-Russian leaders in Ukraine.

Western leaders have threatened additional sanctions against Russia, which they accuse of stoking tension in Ukraine. Moscow denies the claim.

A statement issued by the Kremlin on Saturday evening said that President Vladimir Putin supported Petro Poroshenko’s ceasefire, “as well as his stated intentions to take a number of concrete steps to achieve a peaceful settlement”.

According to the statement, Vladimir Putin also insisted that the plan would only work if it led to “meaningful negotiations and political compromise between the opposing sides in eastern Ukraine”.

Ukrainian forces have struggled to regain control of buildings and territory that have been seized by the armed separatists in eastern regions bordering Russia.

On Friday night, the separatists attacked three Ukrainian border posts in the Donetsk and Luhansk regions, Kiev said.

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According to Ukrainian officials, pro-Russian separatists have carried out several attacks on Ukrainian troops despite a unilateral ceasefire declared by Kiev.

They say at least six border guards had been injured in shelling in the east.

The rebels earlier dismissed the week-long truce called by President Petro Poroshenko, the first step of his peace plan announced on Friday.

Pro-Russian separatists have carried out several attacks on Ukrainian troops despite a unilateral ceasefire declared by Kiev

Pro-Russian separatists have carried out several attacks on Ukrainian troops despite a unilateral ceasefire declared by Kiev

On Saturday, however, Russian President Vladimir Putin said he backed the plan – if it included talks with the rebels.

Vladimir Putin also said Ukraine must make compromises with the rebels.

He repeated the Kremlin’s earlier criticism of the plan, saying that the temporary ceasefire which accompanied the proposals must not be offered as an ultimatum.

Meanwhile, the US imposed sanctions – including asset freezes – against seven pro-Russian leaders in Ukraine.

Western leaders have threatened additional sanctions against Russia, which they accuse of stoking tension in Ukraine. Moscow denies the claim.

In a separate development, Vladimir Putin ordered forces in Russia’s central military district to be put on full combat alert for a week.

The drill does not affect troops near the border with Ukraine. Vladimir Putin has ordered several such alerts to test combat readiness in recent months.

Overnight, the separatists attacked three Ukrainian border posts in the Donetsk and Luhansk regions, Kiev said.

The rebels shelled the posts with rocket and mortar fire, injuring six border guards.

The gunmen also attacked Ukrainian forces outside the Kramatorsk airfield, in the Donetsk region.

The Ukrainian forces returned fire, and all the attacks were repelled, Kiev said. However, Ukraine’s border guard service said its personnel at the Izvaryne post, Luhansk region, were forced to retreat into Russian territory.

A number of casualties were reported among the separatists.

President Petro Poroshenko on Friday declared the ceasefire to give rebels time to disarm. It became effective from 22:00 local time.

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Ukraine’s President Petro Poroshenko has announced a week-long unilateral ceasefire in fighting with pro-Russian militants in the east of the country.

Heavy fighting had been continuing between Ukrainian government forces and pro-Russia rebels, with new reports of military hardware entering Ukraine.

President Petro Poroshenko has announced a week-long unilateral ceasefire in fighting with pro-Russian militants in east Ukraine

President Petro Poroshenko has announced a week-long unilateral ceasefire in fighting with pro-Russian militants in east Ukraine (photo Reuters)

The ceasefire had been expected ahead of the implementation of a peace plan.

However, correspondents say pro-Russian insurgents seem to have no intention of laying down their arms.

It comes a day after President Petro Poroshenko held his second phone conversation this week with Russia’s President Vladimir Putin.

The peace plan proposed by Petro Poroshenko promises to decentralize power and hold early local and parliamentary elections.

It also proposes the creation of a 6 mile buffer zone on the Ukrainian-Russian border, and a safe corridor for pro-Russian separatists to leave the conflict areas.

Ukraine’s President Petro Poroshenko has said he will sign a controversial association agreement with the EU on June 27.

Petro Poroshenko’s elected pro-Russian predecessor, Viktor Yanukovych, was overthrown in February after refusing to sign the deal at the last moment.

Heavy fighting has erupted between troops and pro-Russian rebels in Donetsk region despite talk of a truce.

President Petro Poroshenko has said he will sign a controversial association agreement with the EU on June 27

President Petro Poroshenko has said he will sign a controversial association agreement with the EU on June 27

Meanwhile, NATO says Russia has moved troops back to the Ukrainian border.

Petro Poroshenko was elected president in May on a pro-EU platform after six months of political turmoil.

Since Viktor Yanukovych fled Kiev, Russia has annexed part of Ukraine’s territory, Crimea, and has also been accused of stoking the rebellion in the east.

According to a UN estimate reported this week, at least 356 people, including 257 civilians, have been killed in eastern Ukraine since May 7.

Political parts of the association agreement were signed in March by Ukraine’s interim government.

Petro Poroshenko made the announcement as he was replacing three senior officials in Kiev.

Ukrainian President Petro Poroshenko has proposed a unilateral ceasefire by his troops to allow pro-Russian separatists to lay down their weapons.

Petro Poroshenko said the peace plan would be implemented “shortly”, Interfax-Ukraine news agency reports.

His announcement comes after Petro Poroshenko held a phone conversation with Russian President Vladimir Putin.

They discussed a solution to the crisis in eastern Ukraine, where pro-Russian rebels are battling government forces.

More than 30 gunmen were killed and wounded in fighting near the town of Schastya in the Luhansk region on Tuesday, a spokesman for the government’s “anti-terrorism operation” said.

UN human rights investigators say the security situation in the Donetsk and Luhansk regions has deteriorated significantly over the past month.

Petro Poroshenko has proposed a unilateral ceasefire by Ukrainian troops to allow pro-Russian separatists to lay down their weapons

Petro Poroshenko has proposed a unilateral ceasefire by Ukrainian troops to allow pro-Russian separatists to lay down their weapons

A report reveals a rising number of abductions and killings, with civilians increasingly caught in the cross-fire and thousands forced to flee the violence.

Meanwhile Ukraine’s Interior Minister Arsen Avakov has said an explosion at a major pipeline in central Ukraine was caused by a bomb.

He said explosives had been placed under a concrete support at the Urengoy-Pomary-Uzhgorod Pipeline.

No-one was reported injured by the blast. European and Russian companies said gas exports were not affected by Tuesday’s pipeline explosion.

Speaking at a graduation ceremony at the National University of Defense in Kiev, Petro Poroshenko said a “brief” truce would be introduced to allow “Russian mercenaries” to leave Ukraine.

The Kremlin confirmed that Petro Poroshenko and Vladimir Putin “touched upon” the issue of a possible ceasefire during their talks on Tuesday.

Correspondents say Petro Poroshenko has made similar comments in the past but it is not clear when the ceasefire will be implemented.

“The peace plan begins with my order for a unilateral ceasefire,” Interfax-Ukraine quoted the president as saying on Wednesday.

“Immediately after that, we must receive support for the presidential peace plan from all sides involved. This should happen very shortly.”

He said Russia was waging “a new type of warfare” with the use of professional subversive groups and volunteers.

Russia says it has launched a criminal investigation into Ukraine’s interior minister and a local governor over the killings of civilians and journalists.

Arsen Avakov and Igor Kolomoisky, governor of Dnipropetrovsk, are accused of organizing military operations, including rocket strikes, in cities such as Donetsk, Sloviansk and Mariupol that left more than 100 dead, Russian state media said.

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Russia has cut off all gas supplies to Kiev, in a major escalation of a dispute between the two nations, Ukrainian Energy Minister Yuri Prodan said.

“Gas supplies to Ukraine have been reduced to zero,” he said.

Russia’s state-owned gas giant Gazprom said Ukraine had to pay upfront for its gas supplies, after Kiev failed to settle its huge debt.

Gazprom had sought from Kiev $1.95 billion – out of $4.5 billion it says it is owed – by 06:00 GMT.

Russia has cut off all gas supplies to Kiev, in a major escalation of a dispute between the two nations

Russia has cut off all gas supplies to Kiev, in a major escalation of a dispute between the two nations

The Russian firm said it would continue to supply gas to Europe.

Russia-Ukraine ties remain tense since Moscow annexed Crimea in February.

Kiev says Moscow backs separatists in the east of the country. Russia denies the charge.

“Today, from 10:00 Moscow time, Gazprom, according to the existing contract, moved Naftogaz to prepayment for gas supplies,” Gazprom said in a statement on Monday morning.

“From today, the Ukrainian company will receive Russian natural gas only in the amounts it has paid for.”

Moments later, both Gazprom and Ukraine’s state-owned Naftogaz company filed lawsuits against each other in the Stockholm arbitration institute.

Gazprom said it wanted to recover $4.5 billion from Naftogaz, which is dealing with gas supplies to Ukraine. Meanwhile, Naftogaz said it was seeking to recover $6 billion in “overpayment” for gas since 2010.

Russian PM Dmitry Medvedev said Ukraine’s position on the issue “smacks of blackmail”.

The latest moves follow crisis talks between Ukraine, Russia and the EU on the issue.

“We reached no agreement. The chances that we meet again are slim,” Gazprom spokesman Sergei Kuprianov said after the latest round of the talks ended in Kiev over the weekend.

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Russian state company Gazprom says Ukraine has to pay upfront for its gas supplies, after Kiev failed to settle its huge debt.

Gazprom had warned it would cut supplies if Ukraine failed to pay $1.95 billion – out of $4.5 billion it says it is owed – by 06:00 GMT.

There is no confirmation supplies have been ended. The Russian firm said it would continue to supply gas to Europe.

Russia-Ukraine ties remain tense since Moscow annexed Crimea in February.

Kiev accuses Moscow of supporting separatists in the east of the country. Russia denies the charge.

“Today, from 10:00 Moscow time, Gazprom, according to the existing contract, moved Naftogaz [Ukraine’s state-owned company] to prepayment for gas supplies,” Gazprom said in a statement.

“From today, the Ukrainian company will receive Russian natural gas only in the amounts it has paid for.”

Gazprom had warned it would cut supplies if Ukraine failed to pay $1.95 billion out of $4.5 billion

Gazprom had warned it would cut supplies if Ukraine failed to pay $1.95 billion out of $4.5 billion

The move follows crisis talks between Ukraine, Russia and the EU on the issue.

“We reached no agreement. The chances that we meet again are slim,” Gazprom spokesman Sergei Kuprianov said after the latest round of the talks ended in Kiev over the weekend.

However, EU Energy Commissioner Guenther Oettinger, who attended the talks, said he was “not pessimistic” about a deal.

He said he would continue to work for an agreement despite his compromise proposal, that Kiev pay $1 billionn on Monday and the rest in installments, being rejected by Gazprom.

Ukraine’s discounted rate for gas was axed in April after Moscow accused Kiev of failing to pays its bills.

On Monday, Gazprom stressed that it would continue to supply European consumers with gas at “full volume” and that it was Ukraine’s responsibility to make sure the gas transited through the country.

However, correspondents say the EU could be affected.

Earlier this month, Gazprom gave Ukraine more time to settle its gas bill after receiving a part-payment of $786 million.

Ukraine said it refused to clear its debts completely in protest at Gazprom’s recent 80% price increase.

Gazprom ended its discount price for Ukraine, which was negotiated by former President Viktor Yanukovych last December, in April.

Before the discount was cancelled, Ukraine’s gas bill was heavily reduced by Russia to $268 per 1,000 cubic meters.

The price is now $485.50 per 1,000 cubic meters, the highest in Europe.

Almost 15% of gas used in Europe comes from Russia via Ukraine, which is why EU members are taking a particularly close interest in the stand-off, observers say.

The talks that ended on Monday had been brokered by EU representatives.

Heading into the negotiations, Kiev said it was ready to make the $1.95 billion payment if Russia cut its price to $326 per 1,000 cubic meters.

But Russian President Vladimir Putin said $385 per 1,000 cubic meters was his final offer.

Prospects of a breakthrough in discussions were diminished in recent days after increasing tension between Kiev and Moscow over the pro-Russian insurgency in the east of Ukraine.

Moscow reacted angrily to a violent protest outside its embassy in Kiev on Saturday after separatists shot down a Ukrainian military plane, killing all 49 people on board.

Meanwhile, Ukraine accused Russia of sending tanks into the east of the country to support pro-Russian fighters.

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A violent protest sparked outside the Russian embassy in Ukraine, which saw windows smashed, the Russian flag torn down and cars overturned.

Russia accused Ukrainian police of doing nothing to stop the attack, and called it a “grave violation of Ukraine’s international obligations”.

Meanwhile NATO released images which it says back up Ukrainian claims that Russian tanks crossed into Ukraine.

Moscow has denied sending the tanks to help pro-Russian rebels in the east.

Ukrainian radicals attacked cars and removed flag from Russian embassy in Kiev

Ukrainian radicals attacked cars and removed flag from Russian embassy in Kiev

A range of images show the T-64 tanks first at a Russian military staging area near Rostov-on-Don, and then apparently inside Ukraine earlier this week.

Unlike Ukrainian armored vehicles, the tanks have no markings or camouflage.

NATO says the pictures “raise significant questions” about Russia’s role in eastern Ukraine.

Saturday’s disturbance in Kiev occurred when several hundred protesters hurled eggs and paint at the Russian embassy.

One petrol bomb was also hurled, windows smashed and flags torn down.

The protesters – some wearing balaclavas – overthrew cars with diplomatic plates. One protester held a sign saying: “Russia is a killer.”

Russia’s protest against the incident was echoed by the US state department: “The United States condemns the attack on the Russian embassy in Kiev, and calls on Ukrainian authorities to meet their Vienna convention obligations to provide adequate security.”

Earlier on Saturday, Ukrainian President Petro Poroshenko vowed to retaliate against pro-Russia separatists in the east after a military plane was shot down by anti-aircraft fire, killing all 49 people on board.

The Ilyushin-76 transport was attacked by separatist forces as it was about to land in the city of Luhansk.

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A Ukrainian military transport plane has been shot down by pro-Russian rebels in Luhansk, killing all 49 Ukrainian service personnel on board.

Ukraine’s defense ministry said the Il-76 transport plane crashed after coming under anti-aircraft fire over Luhansk.

In a statement it said “terrorists” had “cynically and treacherously” fired on the aircraft.

The plane was carrying troops and military equipment and was about to land at the city’s airport.

It is thought to be the biggest loss of life suffered by government forces in a single incident since Kiev began an operation to try to defeat the insurgency in east Ukraine.

A Ukrainian military transport plane has been shot down by pro-Russian rebels in Luhansk, killing all 49 people on board

A Ukrainian military transport plane has been shot down by pro-Russian rebels in Luhansk, killing all 49 people on board

Military spokesman Vladislav Seleznov said “preliminary information” suggested all 49 military personnel on board the aircraft – nine flight crew and 40 troops – were killed.

He added that the investigation was just beginning into how the separatists brought down the plane, but initial reports indicated that three “Stinger-like” missiles were used.

The incident came less than a week after pro-Russia rebels launched a series of attacks on Ukrainian forces at Luhansk International Airport.

The airport has been under the control of government forces but the rebels hold most of the rest of the city.

Luhansk is the main city of one of two eastern regions where pro-Russia separatists have declared independence from Kiev.

The “anti-terrorist operation” by Ukraine government forces has left at least 270 people dead over the past two months.

Ukraine’s new President Petro Poroshenko had said that fighting must end “this week” following his inauguration in Kiev last Sunday.

Meanwhile, the US said it was confident that tanks being used by separatists in eastern Ukraine came from Russia.

“Russia will claim these tanks were taken from Ukrainian forces, but no Ukrainian tank units have been operating in that area,” a US state department spokeswoman said.

“We are confident that these tanks came from Russia,” she added.

The appearance of the tanks, filmed in various towns in the Donetsk region, sparked a row between Kiev and Moscow.

Russia has denied allegations that the tanks had entered Ukraine from its territory.

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Ukraine’s troops have won back the port city of Mariupol from pro-Russian separatist rebels after heavy fighting.

Interior Minister Arseny Avakov said the security forces had successfully brought separatist strongholds in the city “under control”.

Five pro-Russian rebels were reported killed and at least four government soldiers injured in the city.

Rebels elsewhere in the region have confirmed they now have three tanks.

Ukraine’s troops have won back the port city of Mariupol from pro-Russian separatist rebels after heavy fighting

Ukraine’s troops have won back the port city of Mariupol from pro-Russian separatist rebels after heavy fighting (photo Reuters)

The appearance of the tanks, filmed in various towns in the Donetsk region, sparked a row between Kiev and Moscow, with Ukrainian President Petro Poroshenko protesting to his Russian counterpart, Vladimir Putin.

Russia denied Ukrainian allegations that the tanks had entered Ukraine from its territory.

Hundreds of combatants and civilians have been killed since pro-Russian separatists in the Donetsk and neighboring Luhansk regions declared independence after holding referendums last month, which were deemed illegal by the government in Kiev.

Arsen Avakov said government forces had raised the national flag over Mariupol’s council building. The port city lies on the Sea of Azov in the south of Donetsk region which has changed hands several time during the conflict.

The operation had begun at 04:50, the interior minister added.

Confirming that four soldiers were injured, Ukraine’s National Guard said on its website that its recently formed Dnepr and Azov “volunteer” units were being used in the operation.

A rebel source told Russia’s Interfax news agency that five fighters had been killed. Several charred rebel armored cars could be seen in the streets after the battle.

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Three tanks have crossed the eastern Ukrainian border from Russia, Ukraine’s interior minister Aresen Avkov has said.

The tanks entered Ukraine along with other armour through a checkpoint controlled by rebels in the Luhansk region, Arsen Avakov said.

Ukraine’s army engaged two of them and destroyed part of the column, he said.

Russia has rejected Arsen Avakov’s statement as “another fake piece of information”.

Meanwhile, Ukrainian President Petro Poroshenko, who was elected last month, and his Russian counterpart Vladimir Putin had a “substantial” conversation by phone on Kiev’s plan of peaceful settlement in the east, Ukraine’s [residency said in a statement.

Three tanks have crossed the eastern Ukrainian border from Russia

Three tanks have crossed the eastern Ukrainian border from Russia

Petro Poroshenko said that it was “unacceptable” for the tanks to be crossing into Ukraine, his press secretary said.

Pro-Russian separatists in the Donetsk and Luhansk regions declared independence after holding referendums last month which were deemed illegal by the government in Kiev.

Ukraine and the West accuse Russia of supporting and arming the rebels – a claim denied by Moscow.

Arsen Avakov said the tanks had crossed the border from Russia along with armoured personnel carriers and artillery pieces in the Dyakove area of Luhansk region, before moving into the neighbouring Donetsk region.

There, Ukraine’s interior minister said, the tanks headed for the town of Snizhne on Thursday morning. Two then proceeded to the town of Horlivka and were attacked by government forces.

“The fight is under way,” Arsen Avakov said.

“I cannot say about its final outcome, but part of this column has been destroyed.”

Unverified video has been posted on YouTube of a battle tank rolling down a street said to be in Snizhne. The footage was shot from a flat overlooking the street.

A second clip, also said to have been recorded in Snizhne, shows a similar tank passing a roundabout.

A rebel spokesman told Russia’s Ria-Novosti news agency that they were fighting a force of 40 Ukrainian tanks north of the city of Luhansk.

The tanks had been stopped at the village of Makarovo, the spokesman said.

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Two Ukrainian military bases in the eastern region of Luhansk have been taken by separatist rebels as fighting continues near the rebel-held town of Sloviansk.

Separatists seized a border guard base after days of fierce combat, and a National Guard base after an attack which began on Tuesday.

An apparent air attack in Luhansk city on Monday killed a number of civilians.

Meanwhile, in the neighboring Donetsk region, troops are closing in on the rebel stronghold of Sloviansk.

Pro-Russian separatists in the Donetsk and Luhansk regions, Ukraine’s industrial heartland, declared independence after holding referendums last month which were declared illegal by the government in Kiev.

Two Ukrainian military bases in the eastern region of Luhansk have been taken by separatist rebels as fighting continues near the rebel-held town of Sloviansk

Two Ukrainian military bases in the eastern region of Luhansk have been taken by separatist rebels as fighting continues near the rebel-held town of Sloviansk

The rebellion began amid the turmoil which followed the downfall in February of the elected Ukrainian President, Viktor Yanukovych, whose pro-Moscow policies sparked mass street protests in Kiev during the winter.

Reports of casualties in the fighting in Luhansk could not be verified independently.

Ukraine’s border service announced on its website that the personnel in the base of the Luhansk border detachment had been “redeployed to safer places” as a result of sustained attacks by large rebel forces.

The National Guard base came under sustained fire from mortars, rocket-propelled grenades, machine-guns and assault rifles on Tuesday after the soldiers rejected an ultimatum from a large rebel force to surrender, according to a report on the National Guard’s website.

Three soldiers were wounded and all of the base’s vehicles and its headquarters building were destroyed in the fighting, the statement said. The garrison, it added, had now been “redeployed to a different, safe place”.

However, a rebel spokesman told Russia’s Ria-Novosti news agency the soldiers had surrendered and had been allowed to “go home”.

The Russian news website ura.ru quoted a rebel commander as saying there had been “no battle as such” and the soldiers had simply surrendered after spiking some of their weapons.

Investigations are continuing into the attack on the rebel-held regional administrative building in Luhansk on Monday afternoon. Rebels have accused the Ukrainian air force of killing eight civilians in the attack, and graphic video of bodies at the scene has been posted on websites.

The Organization for Security and Co-operation in Europe said that, based on available evidence, “these strikes were the result of non-guided rockets shot from an aircraft. The number of casualties is unknown”.

But the Ukrainian authorities deny their planes were involved and suggest the damage was caused by the rebels themselves.

Ukraine’s interim President, Olexandr Turchynov, said in a statement on Tuesday that the northern part of Donetsk region had been “fully cleared” of separatists and the military had started blocking the border with Russia in the north and east of Luhansk region.

Government forces took the town of Krasnyi Lyman, north-east of Sloviansk, after heavy fighting.

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President Barack Obama met Ukraine President-elect Petro Poroshenko, and pledged support for plans to restore peace to the country.

Both presidents are in Warsaw to mark 25 years since the fall of communism in Poland.

Barack Obama called Petro Poroshenko a “wise selection” to lead Ukraine, and said the nation could become a vibrant, thriving democracy if the world community stood behind it.

President Barack Obama met Ukraine President-elect Petro Poroshenko, and pledged support for plans to restore peace to the country

President Barack Obama met Ukraine President-elect Petro Poroshenko, and pledged support for plans to restore peace to the country

Petro Poroshenko, a billionaire sweet manufacturer, was elected in May and will be inaugurated as Ukraine’s president on Saturday.

Barack Obama pledged $5 million of military assistance to Kiev including body armor and night-vision goggles.

The aid follows $18 million promised since early March for food, clothes, radios and other equipment.

Barack Obama has now arrived in Brussels for a meeting of the G7 major industrial nations, the first since Russia was removed from the G8 in protest over its annexation of Crimea in March.

He is expected to attend the 70th anniversary commemorations of the D-Day landings in Normandy on Friday. Russian President Vladimir Putin will also be at the ceremony but the two leaders have no meeting scheduled.

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A military helicopter has been shot down by pro-Russian rebels in eastern Ukraine, near Sloviansk, killing 14 people, outgoing President Oleksandr Turchynov says.

Oleksandr Turchynov said the rebels used a Russian-made anti-aircraft system, and a senior general was among the dead.

The town of Sloviansk has seen fierce fighting between separatists and government forces in recent weeks.

President-elect Petro Poroshenko has vowed to tackle “bandits” in the east.

The military helicopter has been shot down by pro-Russian rebels near Sloviansk, killing 14 people

The military helicopter has been shot down by pro-Russian rebels near Sloviansk, killing 14 people (photo AFP)

The helicopter was hit during heavy fighting between Sloviansk and Kramatorsk, reportedly after it had dropped off troops at a military base.

Oleksandr Turchynov said the 14 dead included Gen. Serhiy Kulchytskiy, head of combat and special training for Ukraine’s National Guard.

It is one of the worst losses of life for government forces in the conflict so far. Last week at least 14 soldiers died in a rebel attack on an army checkpoint near Donetsk, some 80 miles from Sloviansk.

Earlier this month the separatists shot down two army helicopters, also near Sloviansk, killing a pilot and another serviceman.

Petro Poroshenko, a confectionery magnate, won 54.7% of the vote in last Sunday’s presidential election, according to final results announced on Thursday.

After the poll, he called the separatists “terrorists” intent on maintaining a “bandit state”. He vowed to tackle them “in hours”, not months.

The conflict has intensified in recent days. The rebels say they lost up to 100 fighters when they tried to seize Donetsk airport on Monday.

Sloviansk has long been the centre of heavy fighting. Pro-Russia militiamen seized four international monitors there on Monday.

The four – a Dane, an Estonian, a Turk and a Swiss national – are members of the Organization for Security and Co-operation in Europe (OSCE).

The self-proclaimed mayor of Sloviansk, Vyacheslav Ponomaryov, told Russia’s Interfax news agency they were safe and well and could be released soon.

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Ukraine’s PM Arseniy Yatsenyuk has called on Russia to control its border to stop “terrorists” from crossing into his territory.

Arseniy Yatsenyuk said Kiev could solve the crisis quickly if Moscow stopped meddling in the situation.

Russian Foreign Minister Sergei Lavrov warned that Kiev’s policies were pushing Ukraine into “fratricidal war”.

Ukraine’s PM Arseniy Yatsenyuk has called on Russia to control its border to stop terrorists from crossing into his territory

Ukraine’s PM Arseniy Yatsenyuk has called on Russia to control its border to stop terrorists from crossing into his territory

Earlier this week rebels and government forces were embroiled in some of the worst fighting of the crisis so far.

The separatists say they lost up to 100 fighters as they tried to seize Donetsk airport from pro-Kiev forces.

Ukraine’s interior ministry says the military is now in full control of the airport, although gunfire was reported in Donetsk itself on Wednesday.

Speaking on a visit to Germany, Arseniy Yatsenyuk said the situation in the east was deteriorating and Russia’s involvement was causing huge difficulties.

“A number of trucks full of live ammunition, full of Russian-trained guerrillas crossed the Russian border into Ukraine,” he said.

“We ask Russia and Putin to block the border to Ukraine. If Russia is out of this game we can handle this situation in a week.”

Meanwhile, the Organization for Security and Co-operation in Europe (OSCE) said it had re-established contact with a monitoring team it reported lost in eastern Ukraine on Tuesday, but it continued to refer to the group as “detained” and their fate is unclear.

UN Secretary General Ban Ki-moon has called newly elected President Petro Poroshenko to congratulate him on receiving a “strong mandate” to govern.

Moscow had criticized the election because many in the east were unable to vote as a result of the unrest.

But analysts say the election has bolstered the confidence of Ukrainian officials in their dealings with Moscow.

On Tuesday, Arseniy Yatsenyuk denied Moscow’s long-standing claim that Ukraine owed billions of dollars in unpaid gas revenues.

The prime minister said that in fact Russia’s state-owed Gazprom owed Ukraine $1 billion in compensation for natural gas seized in the annexation of Crimea.

Gazprom’s chief executive Alexei Miller said on Wednesday that Ukraine had used $1.7 billion worth of gas in May alone, and would owe $5.2 billion by June 7.

Ukraine’s army is now in full control of the airport in the eastern city of Donetsk after a day of bloody clashes, the interior ministry announced.

More than 30 pro-Russia separatists were reported killed after an attempt to seize the airport early on Monday.

Ukraine's army is now in full control of the airport in the eastern city of Donetsk after a day of bloody clashes

Ukraine’s army is now in full control of the airport in the eastern city of Donetsk after a day of bloody clashes

Ukraine’s newly elected President Petro Poroshenko vowed to tackle the eastern uprising in hours, not months. Russia has called for an immediate end to military action.

Meanwhile, the Organization for Security and Co-operation in Europe (OSCE) says it has lost contact with a monitoring team.

The OSCE said four of its monitors were on a routine mission east of Donetsk when they were stopped at a checkpoint at about 18:00 on Monday.

The monitors, all male, were Turkish, Swiss, Estonian and Danish. Danish trade minister Mogens Jensen said it was believed they were being held by armed separatists.

In April, seven international military observers linked to the OSCE were held captive in eastern Ukraine for a week.

President Barack Obama had telephoned Petro Poroschenko on Tuesday to congratulate him on his victory in Sunday’s elections and offer him “the full support of the United States”, said the White House.

Ukraine’s Interior Minister Arsen Avakov said the airport was “under our full control” but operations were continuing.

Sporadic gun and artillery fire could be heard into the afternoon.

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At least 30 pro-Russia separatists have been killed so far during clashes with Ukrainian forces at the Sergei Prokofiev Airport in the eastern city of Donetsk, insurgents say.

Armed separatists tried to take over the airport on Monday.

Ukraine’s newly elected President Petro Poroshenko vowed on Monday “anti-terrorist operations” in the east would “last hours not months”.

One insurgent told Associated Press the bodies had been brought to a hospital in Donetsk.

At least 30 pro-Russia separatists have been killed so far during clashes with Ukrainian forces at the Sergei Prokofiev Airport in Donetsk

At least 30 pro-Russia separatists have been killed so far during clashes with Ukrainian forces at the Sergei Prokofiev Airport in Donetsk (photo Reuters)

Interior Minister Arsen Avakov said there were no casualties among Ukrainian troops.

Monday’s clashes started after separatist militants stormed the Sergei Prokofiev Donetsk airport in the early hours of the morning.

The Ukrainian military responded quickly with air strikes and an assault by heavily armed troops.

Reporters said there was heavy gunfire throughout the day and night, with black smoke rising into the air.

The attempt to seize the airport may have been intended to prevent Petro Poroshenko from travelling there after he said his first trip in office would be to visit the restive east.

Petro Poroshenko, a 48-year-old billionaire and former foreign minister, was on Monday formally declared the winner of Sunday’s presidential election with 54% of the vote.

He vowed east Ukraine would not be “turned into Somalia”, adding: “The anti-terrorist operation cannot and should not last two or three months. It should and will last hours.”

However, President Petro Poroshenko has also said he wants to talk to Russia to end the crisis.

Russia’s Foreign Minister Sergei Lavrov said Moscow was “open to dialogue” with Petro Poroshenko but insisted that military action against separatists must end.

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President Vladimir Putin has ordered the withdrawal of the Russian troops from Ukraine’s border, the Kremlin says.

Units in the Rostov, Belgorod and Bryansk regions should return to their permanent bases, a statement said.

Russia has made a similar statements in the past, only for NATO to report no change.

Vladimir Putin has ordered the withdrawal of the Russian troops from Ukraine's border

Vladimir Putin has ordered the withdrawal of the Russian troops from Ukraine’s border

Correspondents say the removal of some 40,000 Russian troops near the Ukrainian border could help de-escalate the Ukraine crisis.

The apparent build-up of Russian forces in the region has ratcheted up diplomatic tensions in recent weeks.

“In connection with the completion of the planned spring phase of military training… at ranges in Rostov, Belgorod and Bryansk regions, Putin ordered the defense minister to withdraw the troops that took part in the exercises,” the Kremlin statement provided to Russian news agencies said.

Tensions between Russia and the West rose after the overthrow of pro-Kremlin Ukrainian President Viktor Yanukovych in February, following months of street protests.

Russia’s subsequent annexation of Crimea triggered a crisis in relations.

Meanwhile, clashes have taken place between Ukrainian government forces and pro-Russia separatist militants in eastern Ukraine.

One Ukrainian soldier was killed and one was injured on Monday in attack by separatists on a checkpoint near Sloviansk, in the Donetsk region, Ukraine’s Interfax news agency quoted the country’s defense ministry as saying.

On Saturday, the separatists appointed a prime minister for what they call the People’s Republic of Donetsk.

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