Ukraine Presses Assault on Rebels With Warning of ‘War’

Ukrainian forces pressed an assault on separatists today as the head of the country’s anti-terror agency said the easternmost regions are “essentially” at war, even as captured international monitors were released.

The Ukrainian government’s operation in the Donetsk region left five dead and 12 wounded, said Vasyl Krutov, the anti-terrorist center’s chief. Government forces secured Slovyansk as operations in Kramatorsk continued, he said. Another 42 people were killed and 125 injured in a building fire and street battle in Odessa that began last night, when pro-Russians attacked marching football fans and a pro-Ukrainian rally.

“What is happening in the east is not a short-term action,” Krutov said today. “This is essentially a war.”

Open clashes are sweeping Ukraine’s east and south, from Donetsk near the Russian border to Odessa, about 100 miles from the European Union’s southeastern frontier in Romania, amid signs the industrial and coastal regions are slipping out of the Kiev government’s control. The U.S. and the European Union accuse Russia of fomenting the unrest, while Russian President Vladimir Putin is “extremely concerned” and is studying the situation, his spokesman Dmitry Peskov, said today.

Kremlin Calls

Peskov said Kremlin officials are getting “thousands of calls” from Ukraine seeking help. Putin has yet to decide how to respond to the escalating conflict, he said.

“People are calling in despair,” he said in a phone conference with reporters today. “They are asking for help. The vast majority are asking for help from Russia.”

In a day of continued violence, in which the airport at Kramatorsk was wrested back from pro-Russian separatists, Organization for Security and Cooperation in Europe observers were freed in Slovyansk near Donetsk and were being delivered to the Council of Europe, the council said today in a statement.

“We, Ukrainians, are now constantly pushed into confrontation, into civil conflicts and to ruination of the country from inside,” said acting President Oleksandr Turchynov on his website today. “We cannot allow this to happen and have to be united in our fight with a foreign enemy who wants to destroy Ukraine.”

Clashes continued in the country’s easternmost region. Eight armed men with guns attacked a national guard patrol last night in Donetsk seeking to gain intelligence about the unit, the number of people and weapons, the Interior Ministry reported on its website.

Buildings Seized

About 200 pro-Russian protesters, armed with batons and waving Russian flags, stormed and seized the security service’s vacant regional headquarters in Donetsk, according to Interfax. In nearby Luhansk, separatists attacked a military recruitment office, taking hostages, Interfax reported. A group of armed activists took over a police building in Horlivka, according to Ukrainska Pravda.

Ukrainian Prime Minister Arseniy Yatsenyuk today urged the security service to act more quickly to free three special-forces soldiers captured in Horlivka earlier.

In Crimea, now under control of Russia, the head of the ethnic Crimean Tatar assembly was denied entrance to his homeland, according to the Ukrainian Foreign Ministry, which called the ban “oppression.”

A pro-unity rally in Kharkiv set for tomorrow was canceled after the violence in Odessa, organizers said on Facebook.

Kerry Warning

U.S. Secretary of State John Kerry said today that he spoke to Russian Foreign Minister Sergei Lavrov by phone to tell him Russia must stop supporting separatists in Ukraine.

“It’s important for Russia to withdraw support from the separatists and to assist in removing people from the buildings and begin to deescalate the situation,” Kerry said in remarks to the press in Kinshasa, Democratic Republic of Congo.

In his own website statement following the conversation, Lavrov said he warned Kerry about a “fratricidal conflict” brewing in Ukraine. He also urged the U.S. to get Ukraine to stop the offensive in the eastern regions.

The yield on Ukrainian government debt rose 25 basis points yesterday to a six-week high of 10.90 percent, data compiled by Bloomberg show. Russian bonds fell, with the yield on ruble-denominated government debt due February 2027 jumping 20 basis points to a seven-week high of 9.67 percent. The ruble slid 0.3 percent against the central bank’s target dollar-euro basket.

‘Losing Hope’

The U.S. and the EU accuse Russia of stirring unrest to undermine Ukraine’s May 25 presidential election. Polish Prime Minister Donald Tusk said at a briefing today in Jezioro, Poland, that officials are “losing hope” about a diplomatic solution to end the crisis.

“This is a war of maybe a different kind, it is a war that’s undeclared,” Tusk was quoted as saying by PAP newswire at a media briefing. “But what we’re really dealing with is de-facto a war. You can clearly see that actions taken by the international community haven’t brought results.”

The violence comes after an April peace accord among Ukraine, Russia, the U.S. and the EU. Though all sides have said that the agreement has been battered by violations, the release of OSCE observers indicates that cooperation can be achieved, the Ukrainian Foreign Ministry said.

“Freeing the OSCE observers is an example that all sides can adhere to the Geneva accord,” the ministry said in a statement. “Ukraine’s Foreign Ministry is calling for the continuation of all necessary efforts to implement the Geneva accord.”

Odessa Violence

U.S. intelligence officials have warned for at least a month of a possible Russian-orchestrated campaign in Odessa similar to those in Crimea and in Ukraine’s easternmost, largely Russian-speaking regions.

Not only does the port city have economic and military significance, it sits between Crimea and pro-Russian areas in eastern Ukraine and the breakaway Transnistria region of neighboring Moldova.

Russian citizens took part in provocation before the bloodshed in Odessa, the Ukrainian Foreign Ministry said in a statement on its website. Their aim was to destabilize the region, the ministry said, citing information from detained Russian citizens.

Turmoil erupted yesterday in Odessa, where 160 people were detained by police, according to the Interior Ministry. The nearby city of Nikolaev hosts much of the country’s defense and shipbuilding industry, as well as Zorya-Mashproekt, a state enterprise that manufactures gas turbines for OAO Gazprom, the Russian natural gas producer and exporter.

‘Work Together

In an e-mailed statement, State Department spokeswoman Marie Harf said the U.S. mourned the loss of those killed in Odessa and called on “all sides to work together to restore calm and law and order.”

The crisis erupted after Ukrainian President Viktor Yanukovych was ousted following months of protests against his decision to spurn an EU association accord for closer ties to Russia in a $15 billion deal. Russia now has 40,000 troops massed on its neighbor’s border, according to NATO.

The assault in Slovyansk marked the biggest operation yet by the Ukrainian government to retake ground from as many as 1,000 armed gunmen who’ve seized buildings in more than 10 towns and taken several dozen captives.

Some anti-Kiev protesters are demanding a referendum on joining Russia akin to the ballot that led to Russia’s annexation of Crimea from Ukraine in March.

Obama, Merkel

U.S. President Barack Obama and German Chancellor Angela Merkel yesterday set the May 25 presidential election as the trigger for possible economic sanctions against Russia if it fails to pull back its support for separatists.

“We have a range of tools at our disposal” to hit various Russian industries with sanctions, Obama told reporters at a joint news conference with Merkel at the White House. If Russia doesn’t change course, “it will face increasing costs,” both economic and diplomatic, he said.

Penalties imposed by the U.S. and European Union have so far targeted officials, individuals and companies tied to Putin’s inner circle.

The next step would be action against sectors of the Russian economy, including banking and energy. Those penalties would have consequences mostly for European countries, which have more extensive economic ties with Russia than the U.S. does.

‘Professional Saboteurs’

Ukraine’s Defense Ministry said the use of advanced weapons showed the separatists were “professional saboteur groups” rather than peaceful protesters. In a statement, it called their tactics “characteristic of foreign military or mercenaries.”

At their news conference in Washington, Obama and Merkel said Russia must pull back support for the separatists so Ukraine’s May 25 presidential election can go ahead unimpeded.

If the vote can’t be held, “we will not have a choice but to move forward” with more sanctions, Obama said. Merkel called the election “crucial” and said she’s ready to support economic sanctions if needed.

Obama is seeking to coordinate a united U.S.-EU response to Russia’s actions in Ukraine. Merkel has a pivotal role. Germany is Europe’s largest economy and had 91.7 billion euros ($127 billion) in trade with Russia in 2013, according to the International Monetary Fund, making Germany is Russia’s second-biggest trading partner. Putin has threatened to escalate economic warfare if further sanctions are imposed.

“When we will reach a particular tipping point is very hard to say in advance,” Merkel said. “But all I can say is that the elections on May 25 are a decisive juncture for me and if there is further destabilization, things will get more and more difficult.”

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