Russia and Ukraine analyse gas dispute plan while fighting continues

Russia and Ukraine have agreed to consider a proposal for Kiev to pay off a multi-billion-dollar gas bill that has soured relations between Moscow and Kiev, while fighting raged all day in eastern Ukraine.

Russia accused NATO of whipping up dangerous tensions near its borders and encouraging Ukraine to use force against pro-Russian separatists. At a tense meeting in Brussels, the alliance urged Moscow to stop arming the rebels.

In Luhansk, at least two people were killed and several injured in an explosion which separatists controlling the eastern city said was the result of an air strike by the Ukrainian military.

This was denied by Kiev, which said it was caused by separatists who had launched a heat-seeking rocket at a Ukrainian plane but the missile had zeroed in instead on the rebel-occupied regional administration building.

Ukraine and its Western allies accuse Moscow of fuelling the pro-Russian uprising that threatens to break up the former Soviet republic of 45 million people. Russia denies orchestrating the unrest, and says Ukraine’s attempts to end it by military force are making the situation worse.

In an a sign of rapprochement, Russia’s and Ukraine’s gas companies agreed to consider a plan for Kiev to pay off its outstanding gas debts, including a proposal that should ensure security of supply until June 2015, European Union Energy Commissioner Guenther Oettinger said.

Earlier, in a conciliatory signal, Russia’s Gazprom had given Ukraine until June 9 to resolve the two countries’ long-running row over gas pricing, postponing a threat to cut off supplies as early as Tuesday.

Following around six hours of talks in Brussels brokered by the European Commission, Oettinger said the company chief executives and their governments would now consider the proposal. He said another round of three-way talks could take place in the coming days

But two top Russian officials turned up the volume of Cold War-style rhetoric in the worst East-West crisis since the fall of Communism a quarter of a century ago.

Foreign Minister Sergei Lavrov said Moscow would submit a draft resolution to the United Nations Security Council later today, calling for an immediate end to the violence in eastern Ukraine and the creation of humanitarian corridors to help civilians escape the fighting.

In pointed comments aimed at newly elected Ukrainian president Petro Poroshenko, Lavrov said that Western nations had assured Russia the situation in Ukraine would improve after the May 25 election that brought him to power. Instead of that, he said, «everything is happening in exactly the opposite way».

«People are dying every day. Peaceful civilians are suffering more and more – the army, military aviation and heavy weapons continue to be used against them,» Lavrov told reporters in Moscow.
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