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Putin unveils peace plan

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Russian President Vladimir Putin has unveiled a peace plan for Ukraine that could be agreed by the weekend to end a devastating conflict that has poisoned East-West ties.

The surprise move could take the wind out of the sails of a high-stakes NATO summit on Thursday where Western leaders led by US President Barack Obama plan to step up their defence of eastern Europe in the face of Russian “aggression”.

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Putin appealed for both sides to lay down their weapons after nearly five months of fighting that has killed 2600 people and been blamed by both Kiev and its Western allies on Putin’s attempts to seize back former Soviet lands.

The sudden glimmer of hope for an imminent end to Europe’s worst crisis in at least two decades saw stocks in key markets rise and the Russian ruble rebound.

But there were signs that the truce deal – which Ukrainian President Petro Poroshenko said was agreed during telephone talks with Putin – lacked universal support.

Ukrainian Prime Minister Arseniy Yatsenyuk said Putin’s announcement was meant to “pull the wool over the eyes of the international community ahead of the NATO summit and an attempt to avert the EU’s inevitable decision to unleash a new wave of sanctions against Russia”.

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Barack Obama. Photo: AAP

Obama, on a highly symbolic visit to former Soviet republic and new NATO member Estonia, said it was “too early to early to tell” if the ceasefire deal would hold.

While the fierce fighting of recent days appeared to have eased, the booms of combat could be heard around the eastern rebel stronghold Donetsk that Ukrainian troops had surrounded before being pushed back by the resurgent militias in recent days.

Putin’s message seemed partially calculated at taking the sting out of the NATO meeting opening in Wales on Thursday where Western leaders are due to address reports Russia was secretly shuttling troops and heavy weapons into eastern Ukraine to help the pro-Kremlin separatists.

The 28-nation alliance plans to unveil a new rapid response force for eastern Europe that Moscow has branded a direct national security threat.

Obama said NATO must send an “unmistakable message of support” to Ukraine.

Ukraine will also host US-led military drills September 13-26 aimed at showing the Kremlin the degree to which Kiev is determined to break its dependence on its former Soviet masters in Moscow.

The first point of a seven-point blueprint announced by Putin demands an end to “active offensive operations by the (Ukrainian) armed forces and armed rebel units in the southeast of Ukraine”.

It also invites international monitors to watch over parts of the border controlled by insurgents and allegedly used to smuggle in Russian weapons and – more recently – highly-trained paramilitary troops.

Putin said he expected a final agreement to be announced by the insurgents and Kiev representatives during European-mediated negotiations on Friday in the Belarussian capital Minsk.

But there were doubts about whether rebel commanders who have been routing Ukraine’s army in recent fighting were willing to either disarm or disband.

One separatist leader in Donetsk said militias would halt fire only if government forces retreat from eastern cities they had been shelling in recent weeks.

Officials revealed on Wednesday that 87 bodies of soldiers had been registered in morgues from recent fighting in the key eastern transport hub of Ilovaysk, a key flashpoint in the new battlefront.

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