Ukraine Fight With Rebels Intensifies as Deaths Mount

Ukraine’s armed forces said they continue to push back separatists in fighting in the country’s east, as the death toll from the conflict, already more than 2,000, mounted further.

Ukraine’s National Guard captured the city of Ilovaysk, leading rebels to counter-attack with tanks and artillery, the force said today on its website. Nine Ukrainian servicemen died and 22 were wounded in the past 24 hours, military spokesman Andriy Lysenko said in Kiev. He later told reporters that government troops control a “significant” part of Luhansk, one of the main separatist strongholds. Thirty-four civilians were killed and 29 hurt in Donetsk, the other redoubt, in the past 24 hours, the regional administration said.

“It’s a question of the next month for the rebels to either be defeated or for Russia to send in far larger forces to stop their defeat,” Joerg Forbrig, senior program officer for central and eastern Europe at the Berlin bureau of the German Marshall Fund of the U.S., said by phone.

Ukraine has been fractured by the fighting that’s erupted since Russia annexed Crimea in March. The conflict, which Ukraine and its allies say is being fueled by President Vladimir Putin’s support for the insurgents, has led to sanctions that have hurt trade and threatened to send Russia’s $2 trillion economy into a recession. Russia denies it’s involved.

Plane Downed

Rebel forces shot down a Sukhoi Su-25 close air-support jet, the Interfax news service cited Lysenko as saying on Ukrainian television. The fate of the pilot wasn’t known.

U.S. non-lethal assistance such as body armor, bulletproof helmets, communications equipment and meals is bolstering the Ukrainian military, the country’s ambassador to the U.S., Olexander Motsyk, said at a Bloomberg Government lunch yesterday in Washington.

The U.S. and other NATO members are working with Ukraine, Motsyk said, though he declined to specify whether the assistance includes military training, intelligence or logistics. “Some things we already got, some things we hope to get as soon as possible,” he said. “Step by step, we’ve improved our logistics and chain of command.”

Ukraine’s currency, the hryvnia, fell 1.5 percent to 13.3 per dollar, extending its August drop to 7.7 percent, the most among currencies tracked by Bloomberg. Russia’s Micex stock index rose 0.7 percent in Moscow, gaining for a ninth day.

Minsk Summit

Putin will have talks with Ukrainian President Petro Poroshenko on the sidelines of an Aug. 26 Customs Union meeting in Minsk, the Kommersant newspaper reported today. This follows a planned visit by German Chancellor Angela Merkel to Kiev for talks with Poroshenko on Aug. 23. Poroshenko is due to join an Aug. 30 European Union summit in Brussels and a Sept. 4 NATO summit in the U.K.

Ukraine’s government says it will declare a truce only if the pro-Russian rebels lay down their arms and Russia stops supplying them with weapons. Russian Foreign Minister Sergei Lavrov, meeting with his Ukrainian, French and German counterparts in Berlin, repeated calls Aug. 18 for an unconditional cease-fire.

German Foreign Minister Frank-Walter Steinmeier said he believes Russia and Ukraine have shifted their positions and are both looking for a way to reach a cease-fire.

‘New Approaches’

“We are in a phase where we begin new approaches to bring forward the talks between the conflict partners -- and I have the impression that it’s not totally without success,” Steinmeier, who hosted the meeting between the Russian and Ukrainian foreign ministers, told ZDF television.

Forbrig said he doubts the government in Kiev wants a cease-fire due to fears that east Ukraine “will end up as a frozen conflict just like the Transnistria region that will be a problem for decades.” Transnistria, on Ukraine’s southwestern border, declared independence from Moldova in 1990. It’s supported by Russia yet isn’t recognized as a state.

Meanwhile, the first trucks from a Russian convoy intended to supply humanitarian aid to rebel-held areas in east Ukraine moved for scanning on the Russian side of the border today as the International Committee of the Red Cross awaits security guarantees so it can accompany the mission.

New Arrivals

Fourteen ICRC members arrived in the southern Russian region of Rostov from Geneva today, so the organization now has about 40 members at the site near the border where the convoy is parked, spokeswoman Victoria Zotikova said by phone.

Russia’s Foreign Ministry said today all the preparations for the mission had been completed and urged that it start as soon as possible.

Billionaire Richard Branson said he’s seeking an audience with Putin as business leaders call for a peaceful end to the conflict. Branson was joined by 15 businesspeople in urging governments to help resolve Ukraine’s crisis and avoid “the Cold War misery of the past,” according to a post on the Virgin Group owner’s blog.

“We will ask for a meeting with President Putin and sit down with him and express our views,” Branson said today in a phone interview from Switzerland.

Before it's here, it's on the Bloomberg Terminal.