US accuses Russia after Putin warning on gas supplies to Europe

In a letter to the leaders of 18
European countries, Putin made clear that his patience would run out over Kyiv’s
$2.2 billion gas debt to Russia unless a solution could be brokered
urgently.

Russia has nearly doubled the gas price it charges Ukraine,
whose economy is in crisis, since pro-Moscow President Viktor Yanukovich was
overthrown two months ago. Russia then annexed the Ukrainian region of Crimea,
provoking the biggest confrontation with the West since the Cold
War.

Putin said Russian exporter Gazprom would demand advance payment for
gas supplies to Ukraine and “in the event of further violation of the conditions
of payment will completely or partially cease gas deliveries”.

That could
have knock-on effects for European Union countries, much of whose Russian gas
flows in pipelines across Ukraine. “We fully realize that this increases the
risk of (Ukraine) siphoning off natural gas passing through Ukraine’s territory
and heading to European consumers,” the letter said.

Russia meets 30
percent of Europe’s natural gas demand and half of this goes through
Ukraine.

The United States accused Moscow of using its vast energy
reserves to pressure the former Soviet republic. “We condemn Russia’s efforts to
use energy as a tool of coercion against Ukraine,” State Department spokeswoman
Jen Psaki said.

U.S. President Barack Obama, in a phone call on Thursday
with German Chancellor Angela Merkel, “underscored the need for the United
States, European Union and other global partners to be prepared to meet further
Russian escalation with additional sanctions,” the White House
said.

State-controlled Gazprom stopped pumping gas to Ukraine during
price disputes in the winters of 2005-2006 and 2008-2009, leading to reduced
supplies in European countries.

Russian officials say gas dealings with
Ukraine are purely commercial and it was forced to move after Kyiv failed to
meet a deadline on Monday to pay for its March supplies.

REBEL
AMNESTY

In Ukraine, pro-Russian separatists occupying two official
buildings in the eastern cities of Donetsk and Luhansk rejected a government
offer of an amnesty in exchange for laying down their weapons.

That
raised fears that the authorities could follow through on a threat to use force
to clear the buildings that have been occupied since last
weekend.

Protesters wearing bullet-proof vests and armed with Kalashnikov
rifles in a former KGB headquarters in Luhansk said they would lay down their
weapons only if Kyiv agreed to hold a referendum on the future of the largely
Russian-speaking region.

Crimea voted last month for union with Russia in
a referendum held after Moscow’s forces had already taken control of the Black
Sea peninsula. Kyiv has rejected holding a similar vote in the east, saying the
occupations are part of a Russian-led plan to dismember the country.

“We
are trying to find a compromise, but the demands put forward by the occupiers
are unacceptable. Our aim is to avoid the use of force, but that option remains
in place,” Deputy Interior Minister Serhiy Yarovy told journalists.

Prime
Minister Arseny Yatseniuk is to travel to Donetsk on Friday to discuss the
crisis.

NATO raised Moscow’s ire by publishing satellite pictures it said
showed a Russian military buildup on the Ukrainian border. Moscow said they had
been taken last year.

“The alliance is trying to use the crisis in
Ukraine to rally its ranks in the face of an imaginary external threat to NATO
members and to strengthen demand for the alliance,” the Russian Foreign Ministry
said in a statement.

NATO Secretary-General Anders Fogh Rasmussen,
visiting Prague, said the threat was real. “Russia is stirring up ethnic
tensions in eastern Ukraine and provoking unrest,” he told a news
conference.

“And Russia is using its military might to dictate that
Ukraine should become a federal, neutral state. That is a decision which only
Ukraine as a sovereign state can make.”

Obama and Merkel in their
conversation called again on Moscow to move its troops back from the border
region.

The White House said pro-Russian separatists, “apparently with
support from Moscow,” were destabilizing Ukraine through “an orchestrated
campaign of incitement and sabotage.”

A Pentagon representative confirmed
that the destroyer USS Donald Cook arrived in the Black Sea on Thursday for
exercises with ships from Romania, Bulgaria and Turkey.

US Treasury
Secretary Jack Lew told his Russian counterpart on Thursday the United States
stood ready to impose additional sanctions on Russia if it continued to step up
tensions, according to a Treasury representative.