Russia Says Ukraine On Brink Of Civil War

KIEV/SLAVIANSK, Ukraine (Reuters) - Russia declared Ukraine on the brink of civil war on Tuesday as Kiev said an "antiterrorist operation" against pro-Moscow separatists was under way, with troops and armored personnel carriers seen near a flashpoint eastern town.

However, 24 hours after a Ukrainian ultimatum expired for the separatists to lay down their arms, witnesses saw no signs yet that Kiev forces were about to storm state buildings in the Russian-speaking east that the rebels have occupied.

Police said separatists had surrendered the police headquarters in Kramatorsk, one of about 10 towns and cities where the separatists have seized buildings. However, an official later said they occupied another building in the town.

Interim President Oleksander Turchinov insisted the operation had started in the eastern Donetsk region, although it would happen in stages and "in a considered way."

Amid the deepest East-West crisis since the Cold War, the leaders of Russia and the United States have called on each other to do all in their power to avoid further bloodshed.

The standoff has raised fears that Moscow might turn off gas supplies to Kiev, disrupting flows to the European Union. Russian exporter Gazprom promised it would remain a reliable supplier to the EU, but German energy company RWE began deliveries to Ukraine on Tuesday, reversing the usual east-west flow in one central European pipeline.

Russian Prime Minister Dmitry Medvedev gave a gloomy assessment after at least two people died on Sunday when Kiev unsuccessfully tried to regain control in the town of Slaviansk, about 150 km (90 miles) from the Russian border.

"Blood has once again been spilt in Ukraine," Medvedev said. "The country is on the brink of civil war," he said on his Facebook page.

Turchinov said the offensive, which he first announced on Sunday, was finally underway. "The antiterrorist operation began during the night in the north of Donetsk region. But it will take place in stages, responsibly, in a considered way. I once again stress: The aim of these operations is to defend the citizens of Ukraine," he told parliament.

At least 15 armored personnel carriers displaying Ukrainian flags were parked by the side of a road around 50 km (30 miles) north of the town of Slaviansk, witnesses said.

Ukrainian troops wearing camouflage gear, armed with automatic weapons and grenade launchers, were stationed nearby, with a helicopter and several buses containing interior ministry personnel near the road.

In Slaviansk itself, where separatists have seized the local headquarters of the police and state security service, a Reuters correspondent heard no shots or blasts.

Outside the occupied police station about a dozen civilians manned barricades that have been built up overnight with more tires and wooden crates. A dozen or so armed Cossacks -- paramilitary fighters descended from Tsarist-era patrolmen -- stood guard at the mayor's offices. Shops were functioning as usual and bread supplies were normal.

"The night passed quickly, thank God," said one civilian on the barricades outside the police station, who gave his name only as Rustam.

Igor Dyomin, a spokesman for the Donetsk region police, said armed militants had ended their occupation of the police station in Kramatorsk, which had begun on Saturday. "They left of their own accord," he said. But later a state security service spokeswoman said rebels had occupied the agency's local offices in the same town.

GREATLY EXAGGERATED STORIES

Ukraine's security forces have been in some disarray since protesters ousted pro-Moscow President Viktor Yanukovich in February. However, the delays to the crackdown may also reflect a desire by the interim leadership to avoid making things worse by causing civilian casualties.

Moscow accused Kiev of provoking the crisis by ignoring the rights of citizens who use Russian as their first language, and it has promised to protect them from attack. Russia also highlights the presence of far-right nationalists among Kiev's new rulers.

However, a United Nations report on Tuesday cast doubt on whether Russian-speakers were seriously threatened, including those in Crimea who voted to join Russia after Moscow forces had already seized control of the Black Sea peninsula.

"Although there were some attacks against the ethnic Russian community, these were neither systematic nor widespread," the report by the UN. human rights office said.

The report cited "misinformed reports" and "greatly exaggerated stories of harassment of ethnic Russians by Ukrainian nationalist extremists."

Russian Foreign Minister Sergei Lavrov denied accusations from both Kiev and the West that Moscow was stirring up the separatists in the east and southeast as a possible prelude to repeating its annexation of Crimea.

"Ukraine is spreading lies that Russia is behind the actions in the southeast," Lavrov said on a visit to China.

He called on Kiev to hold back before a meeting between Russia, the EU, the United States, and Ukraine that was planned for Geneva on Thursday. "The use of force would sabotage the opportunity offered by the four-party negotiations in Geneva," he said.

Moscow has demanded constitutional change in Ukraine to give more powers to Russian-speaking areas, where most of the country's heavy industry lies, while the secessionists have demanded Crimean-style referendums in their regions.

Kiev opposes anything that might lead to the dismemberment of the country. But in an attempt to undercut the rebels' demands, Turchinov has held out the prospect of a nationwide referendum on the future shape of the Ukrainian state.

REVERSE FLOWS

RWE's deliveries of gas to Ukraine through a pipeline from Poland marked an initial step in EU efforts to counter the risk that Russia will turn off the taps.

Central Europe's pipeline network is designed to carry Russian gas westward. But Polish operator Gaz-System said it had reversed the flow to send back 4 million cubic meters per day, the equivalent of 1.5 billion annually -- modest volume compared with Ukraine's need for more than 50 billion cubic meters per day.

Moscow has nearly doubled the price it charges Kiev this year, and President Vladimir Putin has threatened to halt supplies if Kiev does not repay more than $2 billion it owes to Gazprom. Putin has also warned EU leaders that this could disrupt their supplies that flow across Ukraine.

Despite the bad East-West climate, London-based energy giant BP said its business in Russia was unaffected. BP owns a 19.75 percent stake in Kremlin-controlled Rosneft, which became the world's top listed oil producer last year.

"We are rock solid with our investments in Rosneft and [we] will stand by our investments. For us it's business as usual," chief executive Bob Dudley told reporters in Moscow.

NATO states have temporarily sent troops, aircraft and ships to Eastern Europe to reassure nervous post-communist alliance members. But Polish Defense minister Tomasz Siemoniak said the Crimean crisis made it vital that NATO station significant numbers of troops there and ignore any objections from Moscow.

"What is really important is the strengthening of NATO's eastern flank," Siemoniak told Reuters.