ULAN BATOR, Sept 3 (Reuters) - Russian President Vladimir Putin said on Wednesday his views and those of his Ukrainian counterpart Petro Poroshenko were "very close" on finding a political solution to the conflict in Ukraine, and called for both sides to observe a ceasefire.
Outlining what he said was a seven-step plan "to end the bloodshed", Putin suggested Kiev and the pro-Russian rebels could reach an agreement at a meeting of the international contact group on Ukraine on Friday in the Belarussian capital Minsk.
Putin's proposals included calls for both the pro-Russian rebels and Ukraine to halt military operations. He called on Ukraine to move its forces back from the frontlines and refrain from shelling in civilian areas.
"Our views on the way to resolve the conflict, as it seemed to me, are very close," Putin told reporters in the Mongolia capital of Ulan Bator, confirming he had spoken to Poroshenko by telephone earlier on Wednesday. "I have drafted ideas for a plan of action."
The Kremlin said earlier on Wednesday that both presidents had agreed on steps towards peace in eastern Ukraine, but denied a statement from Poroshenko's press office that they had reached a truce, saying Russia was not a party to the conflict.
Putin also called for international observers to monitor a possible ceasefire and create what he called a "zone of safety" on the ground in eastern Ukraine.
A prisoner exchange between the two sides and a humanitarian corridor for the safe passage of refugees, aid and the wounded were among the steps he listed for a resolution of the conflict.
The contact group, in which Ukraine is informally represented by its former president Leonid Kuchma, met for preliminary talks earlier this week.
Separatist leaders, Moscow's ambassador to Kiev and a senior official for the Organization for Security and Cooperation in Europe also took part in those talks on Monday in Minsk.
"I very much count on Ukrainian leadership supporting this emergent progress in bilateral relations and using the positive work of the contact group to achieve a final and comprehensive resolution of the situation," Putin said. (Reporting by Vladimir Soldatkin; Writing by Alissa de Carbonnel, editing by Jason Bush and John Stonestreet)