Obama offers to lift sanctions if Russia ‘changes course’ on Ukraine

UNITED NATIONS — US President Barack Obama on Wednesday slammed Russia's "aggression" in Ukraine but offered to lift sanctions against Moscow if it threw its weight behind an unravelling peace deal with Kiev.

The outstretched hand to Moscow came a day after pro-Russian guerrillas brushed off Ukrainian President Petro Poroshenko's limited self-rule offer and announced plans to set up their own parliaments in self-organised November 2 polls.

The autonomy offer was at the heart of the pro-Western leader's attempts to quell a revolt that has devastated the ex-Soviet nation's economy and revived a Cold War-era mistrust between Moscow and the West.

A tough-talking Obama told a special UN General Assembly session in New York that Russia was on the wrong side of history in Ukraine. But he also stressed that a ceasefire deal agreed earlier this month offered an opening towards diplomacy and peace.

"Russian aggression in Europe recalls the days when large nations trampled small ones in pursuit of territorial ambition," Obama told the General Assembly with Russian Foreign Minister Sergei Lavrov in attendance.

"We will impose a cost on Russia for aggression." 

But if Moscow "changes course", he added, "then we will lift our sanctions and welcome Russia's role in addressing common challenges".

Poroshenko himself has issued no comment since seeing his high-stakes bid to resolve a crisis that has killed more than 3,200 people so openly challenged just days after it was unveiled.

Poroshenko had proposed that rebel-held parts of the Russian-speaking east hold local council elections December 7 that would help war-scarred towns and cities restore basic services but not push ahead with any independence claims.

But the Kremlin appeared ready to ratchet up tensions by focusing state media on claims of the bodies of four tortured civilians being discovered in an eastern coal mine that had allegedly served as a Ukrainian military base.

The unconfirmed reports topped the headlines on Kremlin-run TV networks that provide most Russians with their news. The foreign minister said that "most likely, we are looking at war crimes that can never be justified".

Both the press office of Ukraine's eastern campaign and the National Guard — a part-volunteer force Moscow frequently brands as "fascists" — denied ever having control of the Donetsk industrial region mine.

Fresh shelling halted AFP attempts to visit the site.

Big guns pull back

Both Kiev and its Western allies fear Putin is trying to turn the east of Ukraine into a "frozen conflict" similar to those that have already given Moscow effective control over parts of the ex-Soviet nations Georgia and Moldova.

Ukrainian Prime Minister Arseniy Yatsenyuk — seen by some analysts as the leader of Kiev's hawkish "war camp" — is expected to raise these concerns when he takes his turn before the UN General Assembly later Wednesday.

Yatsenyuk will make sure "discussions continue on arms sales and more direct support to Ukraine's stand against Russia", Kiev's SP Adviser's brokerage said in a report.

The string of recent peace overtures have helped calm the deadliest fighting and allowed some of the 650,000 people driven out of their homes by the conflict start rebuilding their lives.

Both sides have also begun pulling back their biggest guns and tanks from the front line in order to establish a 30-kilometre buffer zone that could be overseen by monitors from the OSCE pan-European security group.

The Kremlin has welcomed the withdrawal as a sign of Poroshenko admitting he did not need a war fought "until there are no more Ukrainians left standing".

Eurasia Group political risk consultancy said the current terms of the peace deal "yields Moscow an acceptable level of control over Ukraine and avoids further sanctions”.

"While the near term will bring some fragile calm, the fundamental clashes that underpin this entire crisis cannot stay hidden for long," it warned.