Russia's President Vladimir Putin on Friday called on pro-Russian separatists to release Ukrainian soldiers who have been surrounded by the rebels in eastern Ukraine.
Putin's statement came several hours after Ukraine accused Russia of entering its territory with tanks, artillery and troops, and Western powers accused Moscow of lying about its role and dangerously escalating the conflict.
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NATO said at least 1,000 Russian troops are in Ukraine and later released what it said were satellite photos of Russian self-propelled artillery units moving last week.
For the second day, Russian markets reacted nervously to the growing escalation of the conflict in Ukraine with the Russian ruble diving to the all-time low of 37.10 rubles against the U.S. dollar in early morning trading.
Markets dropped on Thursday on reports of Russia's apparent invasion in Ukraine, sparking investors' fears of further economic sanctions directed at Moscow. The ruble lost 1.4 per cent against the dollar and the MICEX benchmark shed 1.6 per cent.
"I'm calling on insurgents to open a humanitarian corridor for Ukrainian troops who were surrounded in order to avoid senseless deaths," Putin said in the statement published on the Kremlin's website in the early hours on Friday.
Ukrainian troops must lay down arms, rebels say
Putin did not address the claims about Russia's military presence in Ukraine. Instead, he lauded the pro-Russian separatists whom he described as "insurgents" for "undermining Kyiv's military operation which threatened lives of the residents of Donbass and has already led to a colossal death toll among civilians."
Separatist militias continue to be supplied with weapons and ammunition from Russia, NATO asserted again on Thursday. (Maxim Shemetov/Reuters)
Putin's statement could be referring to Ukrainian troops who have been trapped outside the strategic town of Ilovaysk, east of Donetsk, for nearly a week now. Protesters rallied outside the Ukrainian General Staff on Thursday, demanding reinforcements and heavy weaponry for the troops outside Ilovaysk, most of whom are volunteers.
A top rebel leader in the rebel stronghold of Donetsk promptly reacted to Putin's appeal but said the Ukrainian troops would have to lay down the arms before they were allowed to go.
"With all our respect to Vladimir Vladimirovich Putin, the president of a country which gives us moral support, we are ready to open humanitarian corridors to the Ukrainian troops who were surrounded with the condition that they surrender heavy weaponry and ammunition so that this weaponry and ammunition will not be used against us in future," Alexander Zakharchenko said on Russia's state Rossiya 24 television.
Two columns of tanks and other equipment entered southeastern Ukraine at midday on Thursday, following heavy shelling of the area from Russia that forced overmatched Ukrainian border guards to flee, according to Col. Andriy Lysenko, a spokesman for Ukraine's national security council.
Obama rules out military action
U.S. President Barack Obama spoke with German Chancellor Angela Merkel, who has been a key power broker between the West and Russia, and both leaders agreed Russia must face consequences for its actions.
Obama ruled out a military confrontation between the U.S. and Russia. He said Russia's activity in Ukraine would incur "more costs and consequences," though these seemed to be limited to economic pressure that will be discussed when Obama meets with European leaders at a NATO summit in Wales next week.
In a phone conversation with Ukraine's President Petro Poroshenko late on Friday, Merkel assured the Ukrainian leader of her support for "decisive actions" that could be taken at a European Council meeting on Aug. 30, Poroshenko's press office said.
In Donetsk, the largest city under rebel control, the mayor's office reported sustained shelling across town on Friday morning. No casualties were immediately reported.
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