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Moscow – Russian President Vladimir Putin on Tuesday asked the upper house of parliament to revoke a resolution allowing him to send troops into Ukraine, a Kremlin spokesperson said.

“In the aim of normalising the atmosphere and resolving the situation in the eastern regions of Ukraine and also in connection with the start of three-way negotiations on this issue, a request was sent to the Federation Council to cancel the resolution,” Russian news agencies quoted spokesperson Dmitry Peskov as saying.

Russian senators granted Putin the right to send the army into Ukraine on 1 March following the ouster in Kyiv of pro-Moscow president Viktor Yanukovych, arguing that Russian speakers in the country are threatened.

Fears of a potential Russian invasion have mounted since then. Nato last week accused Moscow of deploying more troops near the border while the United States said it would not accept use of Russian force in the country “under any pretext”.

The deputy head of the Federation Council’s foreign affairs committee Andrei Klimov told Interfax that lawmakers in the rubber-stamp chamber would back the proposal to withdraw the authorisation for military intervention at a vote on Wednesday.

Russia’s markets responded swiftly to the announcement, with the MICEX stock exchange jumped about 1.5% while the dollar-denominated RTS climbed 2.7% two hours after the announcement, to a level unseen since January.

The surprise de-escalation comes as pro-Russian insurgents in eastern Ukraine agreed to a temporary ceasefire and talks with the new Western-backed president, following unexpected support for the peace initiative from Putin.

Kyiv and its Western allies have accused the Kremlin of backing the rebels and US President Barack Obama warned Putin on Monday that Russia risks fresh sanctions if it does not move to defuse the crisis.

In March, Russia did deploy troops on Ukrainian soil, into the Black Sea peninsula of Crimea before officially annexing the territory later that month.