April 15 (Bloomberg) -- Ukraine unleashed an offensive to dislodge militants from cities in the eastern Donetsk region as authorities in the capital Kiev said Russian special forces were identified among the anti-government groups.
From four to 11 militants were killed and two wounded when Ukrainian troops stormed an airfield in Kramatorsk, taking it under control, Russian state television reported. Ukrainian units backed by armored personnel carriers blocked all approaches to the town of Slovyansk, the Russian state news service RIA Novosti said, citing a pro-Russian activist. Elements of Russia’s 45th Airborne Regiment were spotted in both towns, Ukrainian First Deputy Prime Minister Vitali Yarema said on Channel 5.
The government in Kiev is taking the battle to the restive east of the country after armed pro-Russian activists occupied administrative buildings in cities including Donetsk, a regional center about 100 kilometers (62 miles) from the Russian border. An attempt to head off the mounting insurgency may escalate tensions with Russia, which warned of a potential civil war. NATO says Russia has 40,000 troops massed on Ukraine’s border after its annexation of Crimea last month.
“The aim of these actions is to protect people,” acting President Oleksandr Turchynov said in a statement on his website. “Apart from Russian special forces and terrorists, there’s hundreds of thousands of innocent Ukrainian people deceived by Russian propaganda, and that is why we will take any needed anti-terrorist actions prudently and responsibly.”
Russian Prime Minister Dmitry Medvedev said on Facebook that “blood was spilled once again in Ukraine. There’s a sense in the country that a civil war could break out.”
Russia’s benchmark Micex Index of equities declined 2.5 percent to 1,311.01, extending its retreat since the takeover of Crimea started on March 1 to 9.3 percent.
The ruble weakened 0.5 percent to 36.1500 against the dollar, extending its drop since Feb. 28 to 0.7 percent.
In Washington, the Obama administration left open the door to providing some form of military aid to Ukraine.
Pressed on whether the U.S. is considering sending equipment such as armored vests or night-vision goggles, White House press secretary Jay Carney said only that lethal equipment, which would include weapons, is “not something we’re currently considering.” Economic aid for Ukraine is the main focus for the U.S., he said.
Poland’s Foreign Minister Radoslaw Sikorski said today in an interview with Polish broadcaster TVN24 that Putin has “a credibility problem” in denying Russian troops are in Ukraine after similar denials in Crimea proved to be false.
Sikorski said that the U.S. is “seriously considering” stationing ground forces in Poland as part of an effort to bolster North Atlantic Treaty Organization forces in eastern Europe.
The deadly clashes have prompted diverging views from Russia and the U.S. Speaking with United Nations Secretary-General Ban Ki-moon, President Vladimir Putin called the events “unconstitutional” and demanded international condemnation of the crackdown, according to a statement e-mailed by the Russian leader’s press service.
The U.S. is “admiring” the restraint show by Ukraine, with Russia directly and indirectly supporting the provocations, said Carney, the White House spokesman.
“Ukraine had no option,” Ievgen Vorobiov, analyst at the Warsaw-based Polish Institute of Foreign Affairs, said by phone from Kiev. “The government’s hand was forced into a very uncomfortable decision, even if it fits into the Russian plan. This strike will send Russia a clear signal that the Ukrainian government isn’t ready to pull out of Donetsk and Luhansk.”
The U.S. and Russia plan to proceed with four-party talks in Geneva with European Union and Ukrainian officials in two days, even as the EU and the U.S. are considering widening sanctions against Russian individuals and possibly companies.
Added sanctions aren’t likely to be imposed until after the Geneva meeting, Jen Psaki, a U.S. State Department spokeswoman told reporters in Washington today.
Ukraine must stop quashing protests and hold a referendum on devolving power to regions, Russian Foreign Minister Sergei Lavrov was quoted as saying by RIA in Beijing today. He said using force could jeopardize the talks.
“Russia is in an excellent bargaining position before the start of talks,” Gary Greenberg, who oversees about $785 million in emerging-market stocks at Hermes Fund Managers Ltd., said in a phone interview from London. “Having provocateurs in Ukraine or having the Ukrainian government forces start shooting puts Russia in much stronger position in its negotiating dance with Europe and the U.S. This is part of their strategy.”
Putin, who plans to hold a televised call-in news conference on April 17, is getting appeals for help from eastern Ukrainians alongside questions about why Russia isn’t taking action, his spokesman, Dmitry Peskov, told reporters today. Putin has parliamentary approval to deploy troops in Ukraine to protect the rights of Russian-speakers and those of Russian heritage.
In making a possible decision to invade Ukraine, “it will only be to protect Ukrainian citizens,” Putin told reporters last month.
The U.S. and the EU are drawing up plans for more sanctions against Russia, as Putin and President Barack Obama remained at odds over who was at fault. The U.S. and EU states say Russia is behind the turmoil that has fueled their worst standoff since the Cold War. Russia denies involvement and says the government in Kiev isn’t protecting Russian-speaking citizens.
At least 20 armored personnel carriers and two helicopters were stationed at a post on the border of Kharkiv and Donetsk regions, with four buses filled with troops seen in the area.
In a phone conversation with Putin last night, Obama “expressed grave concern about Russian government support for the actions of armed, pro-Russian separatists.” He urged Putin to get them to withdraw from facilities they seized, according to a White House statement. Putin told Obama he should “use the American side’s capabilities to prevent the use of force and bloodshed as much as possible,” according to a Kremlin statement.
EU ministers meeting in Luxembourg yesterday added four Ukrainians to the list of people being sanctioned, including former deputy Prime Minister Serhiy Arbuzov. EU sanctions now cover 55 Ukrainians and Russians.
The bloc indicated it will widen the blacklist to target people and possibly groups or companies responsible for destabilization in eastern Ukraine. Any sign that Russian troops were crossing into eastern or southern Ukraine would be a trigger for the European Union to impose economic sanctions, according to Hungarian Foreign Minister Janos Martonyi.
“If Russian troops cross the border -- a military incursion or invasion -- into eastern or southern Ukraine, that would suddenly be a cause for launching stage three, economic sanctions, or targeted measures,” Martonyi said in an interview today in Brussels.
To contact the reporters on this story: Jake Rudnitsky in Moscow at email@example.com; James G. Neuger in Luxembourg at firstname.lastname@example.org; Kateryna Choursina in Kiev at email@example.com