April 14 (Bloomberg) -- Russia and the U.S. traded barbs at an emergency meeting of the United Nations Security Council as a deadline passed for pro-Russian separatists to leave buildings they occupied amid escalating violence in eastern Ukraine.
Russia called the meeting after protests escalated near Slovyansk, about 240 kilometers (150 miles) from the Russian frontier. Camouflaged gunmen fired on Kiev government troops in an anti-terror operation, killing one serviceman and wounding five, the Ukrainian government said. There were no reports of Ukrainian forces moving on the buildings after a 9 a.m. deadline to free them set by acting President Oleksandr Turchynov passed.
“Insecurity in Ukraine is written and choreographed by Russia,” U.S. Ambassador to the UN Samantha Power told the Security Council last night. “The U.S. stands with Ukraine and the fundamental principle that the future of Ukraine must be decided by the Ukrainian people.”
NATO, the European Union and the U.S. urged Russia to “de-escalate” the crisis and pull back its troops from Ukraine’s borders. Envoys from Ukraine, Russia, the U.S. and the EU also are scheduled to hold talks on the crisis in Geneva April 17. The U.S. said in a separate statement that Russia’s actions in eastern Ukraine are similar to those carried out in Crimea before it was annexed by President Vladimir Putin last month.
The yield on Ukraine’s Eurobond due 2023 rose 14 basis points to 9.383 percent and the hryvnia weakened 0.3 percent to 12.75 per dollar, bringing 2014’s loss to 35 percent. Russia’s ruble depreciated 0.9 percent against the U.S. currency, the most in a week. Oil and gold gained while European stocks fell.
Ukraine’s Ambassador to the UN Yuriy Sergeyev said Russia is sending special forces to his country to organize the unrest.
Russian Foreign Minister Sergei Lavrov denied today that military or security service personnel are in Ukraine, saying the government in Moscow isn’t interfering in its neighbor’s affairs. The use of force to end the unrest would be very dangerous, he said in Moscow.
Russia blamed the U.S. for events in eastern Ukraine.
“This is their responsibility,” Russian envoy to UN Vitaly Churkin told the Security Council. “Clearly they are the chaperoning power of the people that came to power after the coup. So it’s their responsibility to prevent further escalation of this crisis.”
The Kiev regime, along with its backers -- the U.S. and other Western powers -- must “disassociate themselves from neo-Nazis, stop force against the Ukrainian people and swiftly start genuine dialogue with the full participation of all the people,” Churkin said.
The confrontation near Slovyansk followed the takeover of a regional police station in Donetsk by pro-Russian gunmen and battles in which police used force to stop separatists from seizing buildings in other towns.
Ukrainian officers “spilled blood in a war that is being carried out by the Russian Federation,” Turchynov said in a statement on his website. “The aggressor has not stopped and continues to organize unrest in the east.”
A national referendum on state structure may be held together with presidential elections set for May 25, Turchynov said today, the Interfax news service reported. The acting president said he’s sure people will opt for a united, independent Ukraine.
After responding to the annexation of Crimea by blacklisting Russian officials, businessmen and a bank, the U.S. and EU have vowed to impose tougher sanctions on Russia if Putin’s government makes another move threatening Ukraine’s sovereignty. European foreign ministers meet today in Luxembourg to discuss the situation in Ukraine.
While continuing diplomatic efforts, the U.S. is “prepared to enact further sanctions in response to Russia’s unjustified & destabilizing actions,” Power said late yesterday via Twitter Inc.
Both sides traded blame for the escalation. Viktor Yanukovych, who was ousted as Ukraine’s president in February following months of protests over his decision to align with Russia rather than the EU, said on Russian television last night that the U.S. is behind the move against the pro-Russian separatists.
One person was killed and nine were wounded in Slovyansk, Interfax reported, citing Donetsk regional Governor Serhiy Taruta. It didn’t give details of who the casualties were. The news service said today that the death toll may be higher -- two servicemen and two protesters.
Russia’s state-run Rossiya 24 TV said Ukrainian pro-Russian “self-defense” forces led by an Afghan War veteran had spread across Slovyansk, and troops allied to the government in Kiev arrived in armored personnel carriers and by helicopter.
Ukraine’s Foreign Ministry said in an e-mailed statement that it has proof Russian special service agents are involved in the “separatist mutiny” and the seizure of buildings. Ukrainian officials will present the evidence to the international community on April 17, when they meet U.S. Secretary of State John Kerry, Lavrov and EU officials, the ministry said.
Prime Minister Arseniy Yatsenyuk’s government wants to increase the powers of regions and to resolve the crisis as soon as possible, he said.
Intelligence reports from the U.S. and its allies indicate that some of the pro-Russian demonstrators infiltrated cities in eastern and southern Ukraine during the past month or even earlier as part of a Russian plan to divide Ukraine into federated regions, some of which may hold referendums to rejoin Russia, as Crimea did, two U.S. officials said.
Speaking on the condition of anonymity to discuss the reports, which they stressed aren’t conclusive, the officials said the assessment continues to be that Putin prefers using a campaign of provocation, propaganda, bribery and subversion -- rather than an outright invasion by Russian troops -- to take over some of parts of eastern and southern Ukraine.
Putin has been ratcheting up pressure on Ukraine, threatening to halt gas shipments to the country. A stoppage may also hurt supplies to the rest of Europe. About 15 percent of Europe’s supplies flow through Ukraine, making it a linchpin in the continent’s energy security.
Without a groundswell of support in eastern regions, it’s probable that Russia will try to push for a federalized Ukraine to weaken the government’s control in the east, said Otilia Dhand, an analyst at Teneo Intelligence in London. Without local support, Russian military intervention would be needed to shift the provinces to Russian control, she said.
“Kiev will have to walk a very thin line between maintaining order and appearing heavy-handed -- and giving Russia an excuse to intervene,” Dhand said by e-mail. “Unfortunately, the growing tension is conducive to accidents and mismanagement, which could potentially lead to both civil conflict or intervention.”