UK Prime Minister David Cameron says Russian President Vladimir Putin "can see he is at a crossroads" over Ukraine.
"If he continues to destabilise Ukraine, there will be further sanctions, further measures and there will be a completely different relationship between European countries and America on the one hand and Russia on the other."
He was speaking at the G20 summit in Australia.

BBC NEWS

Despite not being on the G-20 agenda the crisis in Ukraine hung heavy over the gathering of leaders from key developing and industrial countries Saturday.

With the meeting in its second and final day, President Obama talked Asia Pacific cooperation and Ukraine with the Australian and Japanese leaders. The leaders called on Russia to stop meddling in Ukraine. They expressed unity "in opposing Russia's purported annexation of Crimea and its actions to destabilize Eastern Ukraine."

They also called for "bringing to justice those responsible for the downing Malaysian flight 17" last July. Thirty-eight Australians were among the 298 people killed when the Malaysian airliner was shot down over war torn Eastern Ukraine.

Russia's Vladimir Putin is present at the summit but keeping a relatively low profile.

British Prime Minister David Cameron on Saturday met with Putin, telling him that Russia has two choices: either implement the Minsk cease fire and withdrawal agreement, or persist with destabilizing Ukraine and face the prospect of further economic sanctions.

Obama is meeting the five European Union leaders present in Brisbane to discuss Ukraine and possible new sanctions.

Putin told a German interviewer that the sanctions are harmful to the world economy and to Russia, and run counter to what the G-20 is trying to do to boost global growth.

Leaders of the BRICS — Brazil, Russia, India, China and South Africa — also met on the sidelines of the Brisbane summit. A short statement issued afterwards made no mention of Ukraine.

The BRICS leaders — who have agreed to share their currency reserves and are setting up an infrastructure development bank— called on the United States to ratify long-delayed International Monetary Fund reforms which give greater voice to BRICS nations. The US, with the largest share of IMF votes, is the only country that has not yet approved the 2010 reforms.

Australian finance minister Joe Hockey says economic matters continue to be the central challenge for the G-20. "We can't rest," he said, "the world needs growth." Hockey said climate change and other issues should not overshadow what he called the real work of the summit.


USA today

 Pro-Russian separatists will vote to set up a breakaway regional leadership in eastern Ukraine on Sunday aiming to take their war-torn region closer to Russia and defying Kiev and the West as the big guns still boom across the territory.

The United States and European Union have denounced as illegitimate the vote which is sure too to stoke tensions further between the West and Russia.

The separatists' poll is the latest twist in a geo-political face-off between Russia and the West over Ukraine going back to the overthrow of a Moscow-backed president in February and the installation of a Ukrainian leadership that seeks integration with mainstream Europe.

In Donetsk, the separatists' political and military stronghold, election workers at a polling station in an elementary school pasted red, black and blue rebel flags over Ukrainian state symbols on ballot boxes ahead of the vote.

"Voters lists were taken out by Ukrainian authorities, so we have had some difficulties, but we're trying to hold a legitimate vote for the people of Donetsk," said Natalia Chaban, an election official at a local school.

The big industrial city, which had a peace time population of nearly one million, experienced some of its heaviest mortar and artillery shelling of the last few weeks just hours before voting was due to begin. Ukraine said six of its servicemen had been killed in the last 24 hours.

Kiev says the vote violates the Minsk protocol that underpins a ceasefire between the rebels and Ukrainian troops. This, although sporadically broken, has allowed a semblance of normality to return to Donetsk following violence that has killed more than 3,700 people.

Kiev's pro-European government says the Minsk agreements, signed by rebel leaders and envoys from Kiev, Russia and the Organization for Security and Cooperation in Europe (OSCE), forsee elections held under Ukrainian law.

These would appoint purely local officials with whom Kiev would agree new local powers to provide the regions with greater say in their own affairs.

The rebels' plan to elect leaders and institutions in a breakaway territory in the regions of Donetsk and neighbouring Luhansk, one week after a Ukrainian parliamentary election, violates that agreement, Kiev says.

The vote is certain to further strain ties between the West and Russia, already under several rounds of European and U.S. sanctions for its role in eastern Ukraine, after Russian Foreign Minister Sergei Lavrov said Moscow would recognise the vote.

German Chancellor Angela Merkel told Russian President Vladimir Putin on Friday the election was illegitimate and would not be recognised by Europe.

"We all understand that the West is fighting with Russia, but they've decided to do it in Ukraine. As for us, we're just trying to survive," said Vitaly, 34, a businessman in Donetsk.

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Rebels say the election will legitimise the separatist leadership and consolidate power, though many Donetsk residents say the vote will change nothing and the outcome is already a foregone conclusion.

Enthusiasm for the rebel cause, which was at its peak in Ukraine's Russian-speaking east following the ouster of Moscow-backed Viktor Yanukovich, waned after violence closed banks and many stores, forcing people out of work.

"As for the elections tomorrow, I don't plan to vote. No one I know plans to either. There is no point," said Natasha, without giving her last name, outside a central Donetsk jewelry store, whose windows have been boarded up for months.

Current rebel prime minister Alexander Zakharchenko, a former mining electrician whose face is plastered on campaign advertisements across Donetsk, is almost certain to win the vote for the leadership of the self-proclaimed Donetsk People's Republic.

Zakharchenko, 38, has pulled colourful campaign stunts comparing the industrial region's coal deposits to the oil reserves in the United Arab Emirates and promising pensioners a monthly stipend that will allow them to go on safari in Australia.

His opponents, two lesser known separatist figures, have rarely, if ever, appeared in public.

At a Donetsk university, students gathered on Saturday to the tune of Russian composer Pyotr Chaikovsky's "Nutcracker Suite" playing over loudspeakers until Zakharchenko arrived, dressed in his camouflage military gear.

"We need a strong republic," he told the hundreds of students assembled in the auditorium of the Donetsk National Technical University, "And your weapons are your textbooks."

The rebel vote, which has no voting lists, will allow internet voting, which has already started, and mobile polling stations, will also select a People's Council, a lawmaking body.

Walking her two months old-granddaughter, Valentina Borisova, 52, said she planned on voting in the election to legitimise the current rebel leadership and start building a future for the region.

"We have to hope for the best and work towards creating our own little country," said Borisova, a worker at a local steel factory.

"Otherwise at our factory we barely have work, and that only happens when Russia delivers raw materials," she said.


reuters

Moscow and Kiev on Thursday clinched a deal that will guarantee that Russian gas exports flow into Ukraine and beyond to the European Union throughout the winter despite their intense rivalry over the fighting in eastern Ukraine.

"There is now no reason for people in Europe to stay cold this winter," said EU Commission President Jose Manuel Barroso, whose offices mediated the talks for months.

He said he was "hopeful that the agreement can contribute to increase trust between Russia and Ukraine."

EU energy chief Guenther Oettinger said that "we can guarantee a security of supply over the winter," not only for Ukraine but also for the EU nations closest to the region that stood to suffer should the gas standoff have worsened.

The agreement long hinged on the question whether Ukraine was in a position to come up with the necessary cash to pay for the gas. "Yes, they are," a confident Oettinger said. The EU is set to come forward with aid to back up the cash-strapped government in Kiev.

Oettinger said the $4.6 billion deal should extend to the spring.

"We can claim and pay for amounts that we need. That question has been totally settled," said Yuriy Prodan, Ukrainian Minister for Energy.

After gas stopped flowing over the summer, Prodan said that it would resume its way into Ukraine "straight after we pay $1.45 billion" in a first portion. "There will be no problems."

The deal only stretches through March and the difficulties of the talks were immediately evident when the Russians and Ukrainians started disagreeing on terms and prices of gas for next summer.

Russian President Vladimir Putin and his Ukrainian counterpart, Petro Poroshenko, agreed earlier this month on the broad outline of a deal, but financial issues, centering on payment guarantees for Moscow, had long bogged down talks.

But with each week, the need for a resolution becomes more pressing, since winter is fast approaching in Ukraine, where temperatures often sink below freezing for days.

Russia cut off gas supplies to Ukraine in June after disputes over Russia's annexation of Crimea in March. Ukraine since then has been relying on gas transfers from other European countries and its own reserves.

The EU has said previously that Ukraine would settle its energy debt to Russia with a $1.45 billion payment by the end of the month and $1.65 billion more by year's end. It has said for new gas deliveries, Ukraine would pay $385 per 1,000 cubic meters, which Russia should deliver following advance payments by Ukraine.

ap