Ukraine Urges Rebel Withdrawal As Obama Presses Moscow

KIEV, Ukraine -- Ukraine urged pro-Russian separatists to stop shelling government troops and start withdrawing their heavy weapons, while President Barack Obama said Russia must choose peace to have U.S. sanctions lifted.

Russian soldiers talks to each other on the top of a tank, some 10 km (6 mi) outside the southern-Russian city of Donetsk.

Separatists shelled government troop-held Donetsk airport and a checkpoint in the area, wounding eight servicemen, military spokesman Colonel Andriy Lysenko told reporters in Kiev today.

He said Russia provided no information to Ukraine about the content of a fourth aid convoy that is on its way to the region.

Russia continues to lie and denies U.S. and European Union allegations that it’s stoking the unrest in eastern Ukraine.

NATO said yesterday Russia has embarked on a “significant” withdrawal of its forces from Ukraine, adding to signs that the truce is holding between the government in Kiev and separatist groups.

The conflict, which erupted after Russia annexed Crimea in March, has killed more than 3,500 people, the United Nations estimates.

Obama, in a speech today to the 69th General Assembly of the UN, said the U.S. and its allies will continue supporting Ukraine while offering Russian President Vladimir Putin a way out of the conflict that has been opened by the cease-fire.

“If Russia takes that path -- a path that for stretches of the post-Cold War period resulted in prosperity for the Russian people -- then we will lift our sanctions and welcome Russia’s role in addressing common challenges,” the U.S. president said.

He urged Russia to adhere to the path of diplomacy and peace.

Sergei Lavrov, Russia’s foreign minister, told reporters in New York that the U.S. can’t dictate terms for a Ukraine peace.

He said Russia is ready for equal dialogue with the U.S. and rejected accusations of aggression in Ukraine.

Ukraine Debt 

Halyna Pakhachuk, head of the Ukrainian Finance Ministry’s debt department, said in an e-mail today that the country isn’t considering debt restructuring “at all.”

The ratio of debt to economic output is “not that high” while “Ukraine will be able to refinance its debt at affordable rates as soon as military actions stop,” according to Pakhachuk’s statement.

Tatiana Orlova, a London-based economist at Royal Bank of Scotland Group Plc, said in an e-mailed note today that “if de-escalation of the Ukraine-Russia conflict continues, we expect a generally positive reaction from Russian markets.”

“Any positive news from the EU next week -- such as a timetable for the gradual withdrawal of biting sanctions against Russia -- could lead to a rally across the board,” Orlova wrote.

Russia’s Micex Index rose 1 percent at 6:25 p.m. in Moscow, while the ruble strengthened 0.9 percent against the dollar.

Demilitarized Zone 

Ukrainian President Petro Poroshenko agreed to a cease-fire with pro-Russian rebels on Sept. 5 and granted them powers to govern the areas they control.

A final settlement to the crisis, which has stirred Cold War tensions, hasn’t yet been found.

The deal to create a 30-kilometer (18 mile) demilitarized zone was struck Sept. 20 in the Belarusian capital of Minsk.

“As soon as” the rebels “start to withdraw their heavy weapons, Ukrainian government troops will also start the weapons withdrawal,” Lysenko said.

“We have already prepared an area for relocation” of equipment.

The EU and the U.S. have imposed sanctions targeting Russian individuals, companies and the nation’s finance, energy and defense industries.

Source: Bloomberg