Merkel warns Russia on sanctions ahead of Berlin talks on Ukraine

German Chancellor Angela Merkel (L) and NATO Secretary General Anders Fogh Rasmussen attend a news conference after talks at the Chancellery in Berlin July 2, 2014. REUTERS/Thomas Peter

BERLIN/KIEV: Germany's Angela Merkel warned Moscow ahead of talks on Ukraine on Wednesday that economic sanctions remained an option unless it backed peace efforts, as Ukrainian government forces pressed on with an offensive against pro-Russian rebels.

The Ukrainian, Russian, German and French foreign ministers went into the Berlin meeting at 4.30 p.m. (1430 GMT) to discuss restoring a 10-day ceasefire in eastern Ukraine, which the chancellor said had prompted "no significant reaction" from the separatists.

"We will not stop looking for diplomatic solutions," Merkel said. "But we are nowhere near where we want to be."

"Regarding sanctions against Russia, we have so far reached level two and we cannot rule out having to go further," she added, referring to measures against Russian officials and firms the West accuses of undermining Ukraine's territorial integrity.

The European Union and United States have threatened to ratchet up sanctions against the Russian economy unless it reins in the separatists in eastern Ukraine. Moscow denies supporting them.

Separatists fired a shoulder-launched missile that struck and damaged an SU-24 attack plane, a military spokesman said. Five servicemen, including a Ukrainian border guard, had been killed since the renewal of the offensive on Monday night.

This brought to a total of 200 the number of Ukrainian service personnel killed since the start of the conflict, including 150 soldiers, Andriy Lytsenko, a spokesman for the national security and defence council said.

Hundreds of civilians and rebels have also died.

"The armed forces and the National Guard are continuing the offensive on terrorists and criminals," Ukrainian parliament speaker Oleksander Turchynov said.

President Petro Poroshenko, under pressure at home to take a tough line on rebels who have been fighting Kiev's forces since April, refused to renew a ceasefire on Monday night and ordered an offensive against "the terrorists, militants and marauders".

That won backing from the United States, but drew criticism from Russia's Vladimir Putin who said Ukraine's newly-elected leader had veered off the road to peace.

Separatism erupted in the Russian-speaking east in April, when rebels seized buildings and strategic points, declaring "people's republics" and saying they wanted union with Russia.

Diplomats cautioned against expecting any major breakthrough at the foreign ministers' meeting in the biggest Russia-West confrontation since the Cold War.

"It would be good if we could agree on steps towards a mutual, lasting ceasefire, but this is anything other than a simple undertaking," German Foreign Minister Frank-Walter Steinmeier said.

"There is not a precise objective. It's an opportunity to work on peace efforts, but we don't want to raise expectations," a French diplomatic source said on Tuesday.

Russian Foreign Minister Sergei Lavrov backed the idea of the meeting with France's Laurent Fabius and Ukraine's Pavlo Klimkin during a phone conversation with Steinmeier late on Tuesday, the Russian Foreign Ministry said.

Poroshenko, who accuses Russia of fanning the conflict and allowing fighters and equipment to cross the border, turned his back on another renewal of a unilateral ceasefire after phone talks with Putin, Merkel and French President Francois Hollande.

The United States defended Poroshenko on Tuesday. U.S. State Department spokeswoman Marie Harf said "it takes two to keep a ceasefire", adding that the president had "a right to defend his country" against rebels who failed to adhere to the truce.

Kiev says that since the ceasefire was initially declared for a week on June 20 - and then extended by three days - 27 Ukrainian servicemen have been killed.

Acting defence minister Mykhailo Koval said late on Monday government forces had carried out strikes against 120 rebel positions. The pilot of an SU-24 hit by rebels managed to regain control and "destroy" an enemy position, a military spokesman said.

Ukraine has been in turmoil since a Moscow-backed president, Viktor Yanukovich, walked away from a free-trade deal with the European Union last year. He was toppled in February after street demonstrations. Moscow responded by seizing Ukraine's Crimea region in March, before the rebels rose up in the east.

On Friday 48-year-old Poroshenko, defying threats by Russia to carry out retaliatory trade action, signed the EU deal.





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