Ukrainian city seized by pro-Russia forces

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Ukrainian city seized by pro-Russia forces
Armed pro-Russian activists stand outside the Ukrainian regional administration building which they seized in the eastern Ukrainian town of Slovyansk, Ukraine, Monday, April 14, 2014. A pro-Russian mob stormed a Ukrainian police station in Horlivka, another city near the Russian border. Later in the day, armed men in masks also seized control of a military airport outside the city of Slovyansk, also in the Donetsk region bordering Russia. (AP Photo/Evgeniy Maloletka)
In this photo taken on Saturday, April 12, 2014, Armed pro-Russian activists stand outside the police station in the eastern Ukraine town of Kramatorsk. The interior minister overnight reported an attack on a police in the city of Kramatorsk, close to the city of Slovyansk. A video from local news web-site Kramatorsk.info showed a group of camouflaged men armed with automatic weapons storming the building. The news web-site also reported that supporters of the separatist Donetsk People's Republic have occupied the administration building, built a barricade with tires around it and put a Russian flag nearby. (AP Photo/Maxim Dondyuk, Russian Reporter magazine) MAGAZINES OUT
Armed pro-Russian activists stand outside the Ukrainian regional administration building in the eastern Ukrainian town of Slovyansk, Ukraine, Monday, April 14, 2014. A pro-Russian mob stormed a Ukrainian police station in Horlivka, another city near the Russian border. Later in the day, armed men in masks also seized control of a military airport outside the city of Slovyansk, also in the Donetsk region bordering Russia. (AP Photo/Evgeniy Maloletka)
Pro-Russian men throw stones during the mass storming of a police station in Horlivka, eastern Ukraine, Monday, April 14, 2014. Ukraine's acting President Oleksandr Turchynov on Monday called for the deployment of United Nations peacekeeping troops in the east of the country, where pro-Russian insurgents have occupied buildings in nearly 10 cities. (AP Photo/Efrem Lukatsky)
Pro-Russian men attack a police station in the eastern Ukrainian town of Horlivka Monday, April 14, 2014. Several government buildings have fallen to mobs of Moscow loyalists in recent days as unrest spreads across the east of the country. (AP Photo/Efrem Lukatsky)
Pro-Russian men storm a police station in the eastern Ukrainian town of Horlivka on Monday, April 14, 2014. Several government buildings have fallen to mobs of Moscow loyalists in recent days as unrest spreads across the east of the country. (AP Photo/Efrem Lukatsky)
A Pro-Russian activist stands during the mass storming of a police station in the eastern Ukrainian town of Horlivka Monday, April 14, 2014. Several government buildings have fallen to mobs of Moscow loyalists in recent days as unrest spreads across the east of the country. (AP Photo/Efrem Lukatsky)
Pro-Russian men throw stones during the mass storming of a police station in Horlivka, eastern Ukraine, Monday, April 14, 2014. Ukraine's acting President Oleksandr Turchynov on Monday called for the deployment of United Nations peacekeeping troops in the east of the country, where pro-Russian insurgents have occupied buildings in nearly 10 cities. (AP Photo/Efrem Lukatsky)
A pro-Russian wearing a gas mask storms a police station in Horlivka, eastern Ukraine, Monday, April 14, 2014. Ukraine's acting President Oleksandr Turchynov on Monday called for the deployment of United Nations peacekeeping troops in the east of the country, where pro-Russian insurgents have occupied buildings in nearly 10 cities. (AP Photo/Efrem Lukatsky)
Pro-Russian men storm a police station in Horlivka, eastern Ukraine, Monday, April 14, 2014. Ukraine's acting President Oleksandr Turchynov on Monday called for the deployment of United Nations peacekeeping troops in the east of the country, where pro-Russian insurgents have occupied buildings in nearly 10 cities. (AP Photo/Efrem Lukatsky)
Pro-Russian men watch during the mass storming of a police station in the eastern Ukrainian town of Horlivka Monday, April 14, 2014. Several government buildings have fallen to mobs of Moscow loyalists in recent days as unrest spreads across the east of the country. (AP Photo/Efrem Lukatsky)
Armed pro-Russian activists seize the Ukrainian regional administration building in the eastern Ukrainian town of Slovyansk, Ukraine, Monday, April 14, 2014. A pro-Russian mob stormed a Ukrainian police station in Horlivka, another city near the Russian border. Later in the day, armed men in masks also seized control of a military airport outside the city of Slovyansk, in the Donetsk region bordering Russia. (AP Photo/Evgeniy Maloletka)
Armed pro-Russian activists seize the Ukrainian regional administration building in the eastern Ukrainian town of Slovyansk, Ukraine, Monday, April 14, 2014. A pro-Russian mob stormed a Ukrainian police station in Horlivka, another city near the Russian border. Later in the day, armed men in masks also seized control of a military airport outside the city of Slovyansk, also in the Donetsk region bordering Russia. (AP Photo/Evgeniy Maloletka)
A Pro-Russian activist uses a fire extinguisher during the mass storming of a police station in the eastern Ukrainian town of Horlivka Monday, April 14, 2014. Several government buildings have fallen to mobs of Moscow loyalists in recent days as unrest spreads across the east of the country. (AP Photo/Efrem Lukatsky)
Pro-Russian men attack a police station in the eastern Ukrainian town of Horlivka Monday, April 14, 2014. Several government buildings have fallen to mobs of Moscow loyalists in recent days as unrest spreads across the east of the country. (AP Photo/Efrem Lukatsky)
A pro-Russian man throws a stone during the mass storming of a police station in the eastern Ukrainian town of Horlivka on Monday, April 14, 2014. Text on the building reads: "Horlivka's police". Several government buildings has fallen to mobs of Moscow loyalists in recent days as unrest spreads across the east of the country. (AP Photo/Efrem Lukatsky)
Pro-Russian activists escort a man (unseen) who they say is a provocateur outside the secret service building in the eastern Ukrainian city of Lugansk on April 13, 2014. Ukraine's interior minister said on April 13 that both sides had suffered casualties during a raid launched by Ukrainian special forces on a police station in the eastern city of Slavyansk that was seized by pro-Russian gunmen. AFP PHOTO / DIMITAR DILKOFF (Photo credit should read DIMITAR DILKOFF/AFP/Getty Images)
Pro-Russian activists escort a man who they say is a provocateur (C) outside the secret service building in the eastern Ukrainian city of Lugansk on April 13, 2014. Ukraine's interior minister said on April 13 that both sides had suffered casualties during a raid launched by Ukrainian special forces on a police station in the eastern city of Slavyansk that was seized by pro-Russian gunmen. AFP PHOTO / DIMITAR DILKOFF (Photo credit should read DIMITAR DILKOFF/AFP/Getty Images)
Pro-Russia activists assist an Orthodox priest walk through a barricade outside the regional police building seized by armed separatists in Slavyansk on April 13, 2014. Kiev said on April 13 that several had been left 'dead and wounded' in fighting to oust pro-Russian gunmen holed up in a police station in the restive eastern city of Slavyansk, as Washington warned Moscow to de-escalate the crisis or face the consequences. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Pro-Russian activists pray near a barricade outside the regional police building seized by armed separatists in Slavyansk on April 13, 2014. Kiev said on April 13 that several had been left 'dead and wounded' in fighting to oust pro-Russian gunmen holed up in a police station in the restive eastern city of Slavyansk, as Washington warned Moscow to de-escalate the crisis or face the consequences. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
An armed pro-Russian protester kisses a cross hanging on the neck of an Orthodox priest as they guard the regional police building seized by armed separatists in Slavyansk on April 13, 2014. Kiev said on April 13 that several had been left 'dead and wounded' in fighting to oust pro-Russian gunmen holed up in a police station in the restive eastern city of Slavyansk, as Washington warned Moscow to de-escalate the crisis or face the consequences. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Armed pro-Russian protesters guard the regional police building seized by armed separatists in Slavyansk on April 13, 2014. Kiev said on April 13 that several had been left 'dead and wounded' in fighting to oust pro-Russian gunmen holed up in a police station in the restive eastern city of Slavyansk, as Washington warned Moscow to de-escalate the crisis or face the consequences. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Pro-Russia supporters surround a man who they say is a provocateur (C) outside the secret service building in the eastern Ukrainian city of Lugansk on April 13, 2014. Ukraine's interior minister said on April 13 that both sides had suffered casualties during a raid launched by Ukrainian special forces on a police station in the eastern city of Slavyansk that was seized by pro-Russian gunmen. AFP PHOTO / DIMITAR DILKOFF (Photo credit should read DIMITAR DILKOFF/AFP/Getty Images)
Armed pro-Russia supporters walk outside the secret service building in the eastern Ukrainian city of Lugansk on April 13, 2014. Ukraine's interior minister said on April 13 that both sides had suffered casualties during a raid launched by Ukrainian special forces on a police station in the eastern city of Slavyansk that was seized by pro-Russian gunmen. AFP PHOTO / DIMITAR DILKOFF (Photo credit should read DIMITAR DILKOFF/AFP/Getty Images)
People greet an ?rmed pro-Russia supporter outside the secret service building in the eastern Ukrainian city of Lugansk on April 13, 2014. Ukraine's interior minister said on April 13 that both sides had suffered casualties during a raid launched by Ukrainian special forces on a police station in the eastern city of Slavyansk that was seized by pro-Russian gunmen. AFP PHOTO / DIMITAR DILKOFF (Photo credit should read DIMITAR DILKOFF/AFP/Getty Images)
Pro-Russia protesters guard a barricade outside a regional police building seized by armed separatists in Slavyansk on April 13, 2014. Ukraine on Sunday launched an 'anti-terrorist operation' in the eastern town of Slavyansk, where pro-Russian gunmen have seized police and security services buildings, Interior Minister Arsen Avakov said. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Pro-Russia activists walk near a barricade outside a regional police building seized by armed separatists in Slavyansk on April 13, 2014. Ukraine on Sunday launched an 'anti-terrorist operation' in the eastern town of Slavyansk, where pro-Russian gunmen have seized police and security services buildings, Interior Minister Arsen Avakov said. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Armed pro-Russian activists occupy the police station carrying riot shields in the eastern Ukraine town of Slovyansk on Saturday, April 12, 2014. Pro-Moscow protesters have seized a number of government buildings in the east over the past week, undermining the authority of the interim government in the capital, Kiev. (AP Photo/Efrem Lukatsky)
Armed pro-Russian activists occupy the police station carrying riot shields as people watch on, in the eastern Ukraine town of Slovyansk on Saturday, April 12, 2014. Pro-Moscow protesters have seized a number of government buildings in the east over the past week, undermining the authority of the interim government in the capital, Kiev. (AP Photo/Efrem Lukatsky)
CAPTION CORRECTS THE NAME OF THE TOWN - Armed pro-Russian activists occupying the police station in the eastern Ukraine town of Slovyansk carry riot shields on in Slovyansk, Saturday, April 12, 2014. Pro-Moscow protesters have seized a number of government buildings in the east over the past week, undermining the authority of the interim government in the capital, Kiev. (AP Photo/Efrem Lukatsky)
CAPTION CORRECTS THE NAME OF THE TOWN - Armed pro-Russian men occupying the police station in the eastern Ukraine town of Slovyansk carry riot shields in Slovyansk, Saturday, April 12, 2014. Pro-Moscow protesters have seized a number of government buildings in the east over the past week, undermining the authority of the interim government in the capital, Kiev. (AP Photo/Efrem Lukatsky)
Armed pro-Russian activists occupy the police station carrying riot shields as people watch on, in the eastern Ukraine town of Slovyansk on Saturday, April 12, 2014. Pro-Moscow protesters have seized a number of government buildings in the east over the past week, undermining the authority of the interim government in the capital, Kiev. (AP Photo/Efrem Lukatsky)
Armed pro-Russian activists occupy the police station carrying riot shields as people watch on, in the eastern Ukraine town of Slovyansk on Saturday, April 12, 2014. Pro-Moscow protesters have seized a number of government buildings in the east over the past week, undermining the authority of the interim government in the capital, Kiev. (AP Photo/Efrem Lukatsky)
Armed pro-Russian activist stands at a makeshift checkpoint at the entrance into the eastern Ukrainian town of Slovyansk on Saturday, April 12, 2014. Pro-Moscow protesters have seized a number of government buildings in the east over the past week, undermining the authority of the interim government in the capital, Kiev. (AP Photo/Efrem Lukatsky)
Pro-Russian protesters holding Russian flags gather at the regional administration building in Donetsk, Ukraine, Saturday, April 12, 2014. Protesters, who have held the administration building in Donetsk since Sunday, initially called for a referendum on secession but later reduced the demand to a vote on autonomy within Ukraine with the possibility of holding another later on whether to join Russia. (AP Photo/Alexander Ermochenko)
Residents waving Russian flags ride in a car in Donetsk, Ukraine, Saturday, April 12, 2014. Protesters, who have held the administration building in Donetsk since Sunday, initially called for a referendum on secession but later reduced the demand to a vote on autonomy within Ukraine with the possibility of holding another later on whether to join Russia. (AP Photo/Alexander Ermochenko)
Armed pro-Russian activists occupy the police station in the eastern Ukraine town of Slovyansk on Saturday, April 12, 2014. Pro-Moscow protesters have seized a number of government buildings in the east over the past week, undermining the authority of the interim government in the capital, Kiev. (AP Photo/Efrem Lukatsky)
Riot police officers watch as masked pro-Russian activists leave the regional prosecutor's office after their talks, in Donetsk, Ukraine, Saturday, April 12, 2014. Saturday morning a group of pro-Russian activists armed with metal sticks seized the office. Later they have left the building after talks with police. Nobody was arrested. (AP Photo/Efrem Lukatsky)
Masked pro-Russian activists look out of a window of the regional prosecutor's office they seized and barricaded inside, as riot police stand, in Donetsk, Ukraine, Saturday, April 12, 2014. Saturday morning a group of pro-Russian activists armed with metal sticks seized the office. They have left the building after talks with police. Nobody was arrested. (AP Photo/Efrem Lukatsky)
Masked pro-Russian activists leave the regional prosecutor's office was riot police, right, watch them, in Donetsk, Ukraine, Saturday, April 12, 2014. Saturday morning a group pro-Russian activists armed with metal sticks seized the office. Pro-Russian activists have left the building after talks with police. Nobody was arrested. (AP Photo/Efrem Lukatsky)
A pro-Russian activist squints as he warms himself near a fire outside the headquarters of Ukraine's security agency building in the eastern Ukrainian city of Lugansk on April 12, 2014. Separatists demanding a referendum to join Russia seized the building a week ago as a wave of secessionist anger swept eastern Ukraine, whose mainly Russian-speaking population feels under threat from a new pro-Western government in Kiev. AFP PHOTO / DIMITAR DILKOFF (Photo credit should read DIMITAR DILKOFF/AFP/Getty Images)
LUHANSK, UKRAINE - APRIL 12: (CHINA OUT, SOUTH KOREA OUT) A government building occupied by Pro-Russian protesters is seen on April 12, 2014 in Luhansk, Ukraine. Pro-Russian protesters have occupied the government building in the eastern cities such as Donetsk and Luhansk, declared the independence from Kiev, while Russian Foreign Minister Sergey Lavrov told there is no intention to annex the eastern Ukraine. (Photo by The Asahi Shimbun via Getty Images)
LUHANSK, UKRAINE - APRIL 12: (CHINA OUT, SOUTH KOREA OUT) A government building occupied by Pro-Russian protesters is seen on April 12, 2014 in Luhansk, Ukraine. Pro-Russian protesters have occupied the government building in the eastern cities such as Donetsk and Luhansk, declared the independence from Kiev, while Russian Foreign Minister Sergey Lavrov told there is no intention to annex the eastern Ukraine. (Photo by The Asahi Shimbun via Getty Images)
Po-Russian activists hold shields signed 'Obama hands off Ukraine'and 'Down with US and EU' as they guard a barricade outside the secret service building in the eastern Ukrainian city of Lugansk on April 12, 2014. Gunmen have taken over a police station in eastern Ukraine, where pro-Kremlin militants are already holding state buildings in several cities, Interior Minister Arsen Avakov said Saturday. 'Armed men in camouflage fatigues have taken the police station in Slavyansk,' Avakov wrote on his Facebook page, adding that 'the reaction will be very strong.' He did not provide any other details.. AFP PHOTO/ GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Po-Russian activists warm themselves outside the secret service building in the eastern Ukrainian city of Lugansk on April 12, 2014. Gunmen have taken over a police station in eastern Ukraine, where pro-Kremlin militants are already holding state buildings in several cities, Interior Minister Arsen Avakov said Saturday. 'Armed men in camouflage fatigues have taken the police station in Slavyansk,' Avakov wrote on his Facebook page, adding that 'the reaction will be very strong.' He did not provide any other details.. AFP PHOTO/ GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Pro-Russia protesters guard a barricade outside a regional police building seized by armed separatists in Slavyansk on April 13, 2014. Ukraine on Sunday launched an 'anti-terrorist operation' in the eastern town of Slavyansk, where pro-Russian gunmen have seized police and security services buildings, Interior Minister Arsen Avakov said. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Pro-Russia activists prepare Molotov cocktails as they guard a barricade outside a regional police building seized by armed separatists in Slavyansk on April 13, 2014. Ukraine on Sunday launched an 'anti-terrorist operation' in the eastern town of Slavyansk, where pro-Russian gunmen have seized police and security services buildings, Interior Minister Arsen Avakov said. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Pro-Russia protesters guard a barricade outside a regional police building seized by armed separatists in Slavyansk on April 13, 2014. Ukraine on Sunday launched an 'anti-terrorist operation' in the eastern town of Slavyansk, where pro-Russian gunmen have seized police and security services buildings, Interior Minister Arsen Avakov said. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
A pro-Russia protester guards outside a regional police building seized by armed separatists in Slavyansk on April 13, 2014. Ukraine on Sunday launched an 'anti-terrorist operation' in the eastern town of Slavyansk, where pro-Russian gunmen have seized police and security services buildings, Interior Minister Arsen Avakov said. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Pro-Russia protesters guard a barricade outside a regional police building seized by armed separatists in Slavyansk on April 13, 2014. Ukraine on Sunday launched an 'anti-terrorist operation' in the eastern town of Slavyansk, where pro-Russian gunmen have seized police and security services buildings, Interior Minister Arsen Avakov said. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Pro-Russia protesters guard a barricade outside a regional police building seized by the armed separatists in Slavyansk on April 13, 2014. Ukraine on Sunday launched an 'anti-terrorist operation' in the eastern town of Slavyansk, where pro-Russian gunmen have seized police and security services buildings, Interior Minister Arsen Avakov said. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Pro-Russia protesters guard a barricade outside a regional police building seized by armed separatists in Slavyansk on April 13, 2014. Ukraine on Sunday launched an 'anti-terrorist operation' in the eastern town of Slavyansk, where pro-Russian gunmen have seized police and security services buildings, Interior Minister Arsen Avakov said. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
Pro-Russian activists stand on a barricade outside a regional police building seized by the armed separatists to prevent storming by the Ukrainian police special team in the eastern city of Slavyansk on April 13, 2014. Ukraine today launched an 'anti-terrorist operation' in Slavyansk, where pro-Russian gunmen have seized police and security services buildings, Interior Minister Arsen Avakov said. 'Units from all of the country's force structures are participating. May God be with us,' the minister wrote on his Facebook page. AFP PHOTO / GENYA SAVILOV (Photo credit should read GENYA SAVILOV/AFP/Getty Images)
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(Reuters) - Armed separatists took virtual control of a city in eastern Ukraine on Saturday and Kiev prepared troops to deal with what it called an "act of aggression by Russia".

Pro-Russian activists carrying automatic weapons seized government buildings in Slaviansk and set up barricades on the outskirts of the city. Official buildings in several neighboring towns were also attacked.

The developments have increased concerns of a possible "gas war" that could disrupt energy supplies across the continent.

"The Ukrainian authorities consider the events of the day as a display of external aggression from Russia," Interior Minister Arsen Avakov said in a statement.

Pro-Russian Gunmen Seize Police Station In Eastern Ukraine

"Units of the interior and defense ministries are implementing an operational response plan," he added.

Russia and Ukraine have been in confrontation since protests in Kiev forced the Moscow-backed president from office, and the Kremlin sent troops to annex Crimea, the home of its Black Sea Fleet and a part of Russia until 1954.

Moscow denies any plan to send in forces or split Ukraine, but the Western-leaning authorities in Kiev believe Russia is trying to create a pretext to interfere again. NATO says Russian armed forces are massing on Ukraine's eastern border, while Moscow says they are on normal manoeuvres.

At least 20 men armed with pistols and rifles took over the police station and a security services headquarters in Slaviansk, a city of over 100,000 people about 150 km (90 miles) from the border with Russia.

Officials said the men had seized hundreds of pistols from arsenals in the buildings. The militants replaced the Ukrainian flag on one of the buildings with the red, white and blue Russian flag.

Washington backed Kiev's assessment that Moscow was responsible. "Worrisome violence in ... Ukraine today. Russia again seems to be behind it," State Department spokeswoman Jen Psaki said on Twitter.

ROADBLOCKS AROUND CITY

On a road leading into Slaviansk, other members of the group, armed with automatic rifles, set up a roadblock and checked vehicles entering the city, a Reuters reporter said.

There was no sign of any Ukrainian law enforcement officials in the city.

Ukraine's Western-backed government warned of tough action if the militants did not lay down their weapons, but it was unclear if the local law enforcement agencies were taking orders from Kiev any more after the local police chief quit.

Kostyantyn Pozhydayev came out to speak to pro-Russian protesters at his offices in the regional capital, Donetsk, and told them he was stepping down "in accordance with your demands". Some of his officers left the building.

The protesters occupied the ground floor of the Donetsk police headquarters and a black and orange flag adopted by pro-Russian separatists flew over the building in place of the Ukrainian flag.

The occupations are a potential flashpoint because if protesters are killed or hurt by Ukrainian forces, that could prompt the Kremlin to intervene to protect the local Russian-speaking population, a repeat of the scenario in Crimea.

Oleksandr Turchynov, the acting Ukrainian president, called an emergency meeting of the national security council for Saturday evening to discuss the unrest in the east.

Ukraine's acting foreign minister, Andriy Deshchytsia, said he had spoken by telephone with Russian Foreign Minister Sergei Lavrov and demanded Moscow stop what he called "provocative actions" by its agents in eastern Ukraine.

Lavrov, in a statement issued by his ministry, said there were no Russian agents in the region and that it would be "unacceptable" if Ukrainian authorities were to order the storming of the buildings.

Ukrainian commentator Sergei Leshchenko said the burst of activity by pro-Russian groups was an attempt by the Kremlin to give it a strong negotiating position before international talks about Ukraine in Geneva next Thursday.

Russia is expected to argue at the talks for a revamp of Ukraine's constitution to give a large degree of autonomy to eastern Ukraine, something Kiev and its Western backers reject.

"Russia will come to the talks with the position that 'Donetsk and several neighboring regions are already ours - now let's talk about federalization'," said Leshchenko, a commentator with the Ukrainska Pravda newspaper.

'GAS WAR'

With the crisis in Ukraine still unresolved, the gas dispute threatens to affect millions of people across Europe.

A large proportion of the natural gas that EU states buy from Russia is pumped via Ukrainian territory, so if Russia makes good on a threat to cut off Ukraine for non-payment of its bills, customers further west will have supplies disrupted.

Russia is demanding Kiev pay a much higher price for its gas, and settle unpaid bills. Russian state-owned gas giant Gazprom and its Ukrainian counterpart, Naftogaz, are in talks, but the chances of an agreement are slim.

"I would say we are coming nearer to a solution of the situation, but one in the direction that is bad for Ukraine," Ukrainian Energy Minister Yuri Prodan said in an interview with the German newspaper Boersenzeitung

"We are probably steering towards Russia turning off its gas provision," he was quoted as saying.

That raised the specter of a repeat of past "gas wars", when Ukraine's gas was cut off with a knock-on effect on supplies to EU states.

The scope for compromise narrowed after the Naftogaz chief executive told a Ukrainian newspaper that Kiev was suspending payments to Gazprom pending a conclusion of talks on a new deal.

Ukraine has de facto stopped payments already because it failed to make an installment of over $500 million due this month to Russian state gas giant Gazprom.

Moscow says it does not want to turn off Ukraine's gas if it can be avoided, and that it will honor all commitments to supply its EU customers.

(Additional reporting by Conor Humphries in Kiev, Alexei Anishchuk, Alessandra Prentice and Vladimir Soldatkin in Moscow, William Schomberg in London, Annika Breidthardt in Berlin, Lina Kushch in Donetsk, Ukraine and Gleb Garanich in Slaviansk, Ukraine; Writing by Christian Lowe and Conor Humphries; Editing by Robin Pomeroy)

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