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Separatists tighten grip on east Ukraine, Obama and Putin talk

Source: Reuters - Tue, 15 Apr 2014 00:03 GMT
Author: Reuters
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* Obama speaks to Putin

* Rebels ignore deadline to surrender arms

* EU step up sanctions against Russia

* Russian stocks and rouble fall sharply (Updates with details of Obama and Putin telephone call)

By Thomas Grove and Gabriela Baczynska

SLAVIANSK/DONETSK, Ukraine, April 14 (Reuters) - Pro-Russian separatists on Monday ignored an ultimatum to leave occupied government buildings in eastern Ukraine and instead seized more buildings as the government failed to follow through on a threatened military crackdown.

U.S. President Barack Obama criticized Russia in a telephone conversation with Russian President Vladimir Putin later on Monday, saying Moscow's actions in Ukraine were not conducive to a diplomatic solution.

The Kremlin said it had requested the call. The White House said the call was frank and direct.

"President Putin called on Barack Obama to do his utmost to use the opportunities that the United States has to prevent the use of force, and bloodshed," the Kremlin said in a statement.

The White House has warned Russia it would face further costs over its actions in Ukraine, but the White House made clear earlier on Monday that the United States was not considering lethal aid for Ukraine.

European foreign ministers agreed to step up sanctions, and U.S. officials have said they were in consultations with European partners on how to punish Moscow for what Kiev and its Western allies call a Russian plot to dismember Ukraine.

Washington has said it is prepared to impose sanctions on Russian individuals and entities in the financial services, energy, metals, mining, engineering and defense sectors.

Moscow has largely brushed off sanctions so far, which the United States and Europe have explicitly designed to target only a limited number of officials and avert wider economic harm.

The Ukraine crisis, and in particular the annexation of Crimea by Russia last month, have led to the biggest confrontation between Moscow and the West since the Cold War.

Pro-Russian rebels have seized buildings in around 10 other towns and cities across other eastern provinces that form the heartland of Ukraine's heavy industry.

In the town of Slaviansk, where the authorities failed to follow through with their announced "anti-terrorist" operation, rebels called for Putin's help.

Ukraine's interim president, Oleksander Turchinov, said on Monday the offensive against the rebels would still go ahead. But in a sign of discord behind the scenes in Kiev, he sacked the state security chief in charge of the operation.

In one of the first signs of a military deployment by Kiev's forces, a Ukrainian column of two tanks and more than 20 armoured personnel carriers packed with paratroops was seen about 70 km (50 miles) northwest of Slaviansk on Monday evening, according to video journalist Maksim Dondyuk who filmed them.

In Donetsk, rebels holed up in the administrative headquarters of a province that is home to 10 percent of Ukraine's population said they planned to seize control of infrastructure and the levers of state power. They have declared an independent "People's Republic of Donetsk" and sought Putin's protection if they are attacked.

In a bid to undercut the rebels' demands, Turchinov held out the prospect of a countrywide referendum on the future shape of the Ukrainian state. Pro-Russian secessionists want separate referendums in their regions, which Kiev says is illegal.

'RUSSIAN INVOLVEMENT'

The uprising in eastern Ukraine began eight days ago but has accelerated sharply in the past 48 hours, with separatists seizing ever more buildings, including arsenals filled with weapons. They have met little opposition.

Kiev says the separatists are organised by Moscow, seeking to repeat the seizure of the Crimea region.

Russia says the armed men are all locals acting on their own, but Western officials say the uprising is too well-coordinated to be entirely spontaneous, and bears too many similarities to the Russian operation in Crimea.

Moscow says it has the right to intervene to protect Russian speakers in Ukraine, and has portrayed the people of the east as under threat from gangs of Ukrainian-speaking "fascists".

NATO says Russia has tens of thousands of troops massed on the frontier, able to capture eastern Ukraine within days.

"I don't think denials of Russian involvement have a shred of credibility," British Foreign Minister William Hague said, before a meeting with EU counterparts.

Hague later announced that the ministers had agreed to expand a list of Russians barred from travelling or doing business in the EU. Work would begin to come up with new names for the sanctions list, Hague said.

Russian stocks and the rouble fell sharply on Monday, reflecting fears of further Russian military intervention in Ukraine and more western sanctions against Moscow.

Kiev is also facing economic disarray. The central bank nearly doubled its overnight interest rate to 14.50 percent from 7.50 percent. Ukraine's hryvnia currency has lost 38 percent of its value against the dollar this year.

ULTIMATUM EXPIRES

Turchinov had threatened to launch a military crackdown by 9 a.m., but as the deadline expired there was no sign of any action in Slaviansk.

Russia's foreign ministry called Turchinov's planned military operation a "criminal order" and said the West should bring its allies in Ukraine's government under control.

Turchinov's website said he told U.N. Secretary-General Ban Ki-moon he would welcome U.N. peacekeepers in Ukraine. The proposal was rhetorical as no such deployment has been proposed or could ever take place over Russia's Security Council veto.

Turchinov's announcement he was sending in the army was the first time the military has been activated in six months of internal disorder. The plan implies a lack of confidence in the 30,000-strong interior ministry troops, partly discredited by identification with ousted president Viktor Yanukovich.

A rebel leader, in an appeal issued through journalists, asked Putin to "help us as much as you can".

The Kremlin said the Russian president was listening.

"Unfortunately, there's a great many such appeals coming from the eastern Ukrainian regions addressed directly to Putin to intervene in this or that form," spokesman Dmitry Peskov said. "The president is watching the developments in Eastern Ukraine with great concern."

Also in Slaviansk, about 150 km (90 miles) from the Russian border, a small airfield that was occupied by Ukrainian air force planes on Sunday was empty on Monday and pro-separatist forces said they were now in control of it.

Eastern Ukraine seems to be rapidly spinning out of the control of the central government. The governor of Donetsk, a multi-millionaire appointed by Kiev, has not been seen since April 11. A man calling himself Donetsk's new police chief has appeared wearing the orange and black separatist ribbon.

The Ukrainian defence ministry acknowledged that it has had difficulty mobilising the armed forces in the east, where some units have been blockaded in by rebellious locals.

"On some occasions we have lost the information war and there have been blockades of our units. People don't understand why they are coming," said acting Defence Minister Mykhailo Koval.

Outside the Slaviansk city council offices stood a group of about 12 armed men in matching camouflage fatigues with black masks, one of whom was holding a Russian flag.

They said they were Cossacks - paramilitary fighters descended from Tsarist-era patrolmen - but did not say from where. One told Reuters: "The borders between Ukraine, Russia and Belarus are artificial and we are here to take them away." (Additional reporting by Natalia Zinets and Richard Balmforth in Kiev; Writing by Peter Graff and Sandra Maler; Editing by Ken Wills)

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