Ukraine Claims Russian Military Buildup Along Border

Ukraine said there is a buildup of Russian military equipment along the eastern border, as President Petro Poroshenko in Kiev announced an armed forces upgrade worth $3 billion.

German Chancellor Angela Merkel is seeking to give momentum to a diplomatic resolution to the conflict convulsing Ukraine as Poroshenko prepares to meet Russian President Vladimir Putin this week.

The Russian buildup of military equpiment is taking place in the region around the city of Rostov, in at least one case 1.5 kilometers (1 mile) from the Ukraine border, according to military spokesman Andriy Lysenko. Pro-Russia rebels have ruined “almost all” of the infrastructure in the city of Luhansk while shelling of Ukrainian troops from the Russian side continues, Lysenko told reporters today.

Peace plans are “on the table” for the Aug. 26 talks between Putin and Poroshenko, Merkel said yesterday on her first visit to Ukraine’s capital Kiev since separatist violence erupted this year.

Merkel said today the talks won’t produce “one big breakthough.”

‘Political Solution’

“But you have to talk with each other if you want to find solutions,” Merkel said in an interview with ARD German television. “I’m firmly convinced there’s only a political solution, in which the European Union and Germany want to and should help.”

Poroshenko said he will present a position coordinated with the EU when meeting Putin during trade talks in the Belarus capital Minsk.

The German leader waded into attempts to overcome the conflict as tensions spiked anew in Ukraine, which has been fractured by fighting that the United Nations says has left at least 2,000 dead since Russia annexed Crimea in March. Merkel said she came to make clear Germany’s call for preserving the former Soviet republic’s territorial integrity.

“Our focus cannot lie with military conflict, which unfortunately is necessary today,” Merkel said at a news conference with Poroshenko yesterday. “There has to be a bilateral cease-fire. Deeds now have to follow words and I think on the Ukrainian side, much has been done.”

Russia Denies

Russia, which Ukraine and its allies blame for stoking the unrest, denies it’s involved in the conflict that has triggered sanctions from the U.S. and Europe.

Poroshenko, in announcing the military upgrade worth more than 40 billion hryvnia, said Ukraine’s army needs to update its weapons and vehicles.

“Unfortunately, there will always be a military threat to Ukraine,” Poroshenko said.

Ukrainian troops killed 30 rebels and destroyed an armored vehicle that were moving from the direction of Russia, the military press office in Kiev said on its Facebook page. Lysenko, the military spokesman, said five servicemen had been killed in the fighting in the last 24 hours while 68 civilians were wounded in Luhansk.

Residences Hit

The Organization for Security and Cooperation in Europe said that a residential area just north of central Donetsk was “severely damaged” by artillery yesterday. OSCE monitors saw three bodies covered with blankets, the organization said in an e-mailed statement today.

Progress at the Minsk talks will be difficult because the parties remain entrenched in their positions over the conflict, according to Oleksandr Sushko, head of the Euroatlantic Cooperation Institute in Kiev.

“There is much expectation for the Minsk meeting but I’m afraid it’s an exaggeration,” Sushko said yesterday by phone. “I don’t see any movement toward the convergence of positions between Ukraine and Russia. Not even a hint. That’s why it’s very important that Ukraine and the EU will have a consolidated position. This will improve the chances for some progress.”

All of about 280 trucks that carried what Russia says is humanitarian aid have returned to Russia, Maria Zakharova, a spokeswoman at the Foreign Ministry in Moscow, said by phone yesterday. A total of 227 vehicles in the convoy crossed back into Russia, the OSCE said in a statement yesterday.

Merkel, Obama

Merkel joined U.S. President Barack Obama in calling the action a violation of Ukraine’s sovereignty. A Ukrainian government official called it an “invasion.”

The vehicles returned to Russia empty, Eduard Chizikov, an official at Russia’s Emergencies Ministry, said on the Rossiya 24 television channel.

Asked whether intensified sanctions against Russia were being considered, Merkel said current efforts would focus on diplomacy and next week’s meeting in Minsk. The Obama administration Aug. 22 said Russia risks deeper punitive measures unless it removes the convoy, which the U.S. deemed a “flagrant violation” of Ukraine’s sovereignty.

“Of course, we can’t rule out that we’ll have to consider further sanctions if there is no progress,” Merkel said.

The U.S. will work with other Group of Seven nations to respond to “Russia’s destabilizing actions” in Ukraine, Vice President Joe Biden told Poroshenko in a phone call, according to an e-mailed statement from the White House.

Fighting continued in the country’s easternmost regions, where government forces have been claiming advances in their efforts to root out the separatists, taking parts of Luhansk and encircling Donetsk, the two largest cities held by the insurgents.

To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net Kevin Costelloe, Pawel Kozlowski

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