Ukraine launches restricted operation

 Ukrainian forces launched a "special operation" on Tuesday against separatist militia in the Russian-speaking East, authorities said, although aside from a landing by airborne troops the action was limited.

Soldiers disembarked from two helicopters at an airfield at Kramatorsk, where reporters earlier heard gunfire that seemed to prevent an air force plane from landing. The troops withdrew into barracks after local civilians manning a barricade gave them a hostile reception when they tried to leave the compound.

In Kiev, acting President Oleksander Turchinov declared a much-needed victory over pro-Russian rebels by saying the air base had been "liberated." But there was no sign of militants.

A senior Ukrainian officer told the unarmed crowd that he had come to direct an "anti-terrorist operation" that Turchinov announced earlier in the day, after more than a week of missed deadlines set by Kiev for armed pro-Moscow activists to end occupations of public buildings in some 10 places in the east. But after a scuffle with some of the hundreds who chanted hostility to the new Ukrainian authorities, some of them holding Russian flags, the troops pulled back at dusk.

Ukraine's state security service said an "anti-terrorist" operation was also in progress against separatists in the nearby town of Slaviansk but there was no immediate evidence of action. Nonetheless, Kiev's stated resolve to challenge militants it says are orchestrated by the Kremlin, marked an escalation of the deepest East-West crisis since the Cold War.

Russian President Vladimir Putin, who is seen by Western diplomats as intent on reasserting Moscow's influence across what was the Soviet Union and beyond, spoke by phone with German Chancellor Angela Merkel, according to Russia's Itar-Tass news agency, saying, "The sharp escalation of the conflict puts the country, in essence, on the verge of a civil war."

The standoff has raised fears in the West and in Kiev that Russia might intervene militarily to "protect" Russian speakers in eastern Ukraine, following its annexation of the Crimean region last month in response to the overthrow of Moscow-backed president Viktor Yanukovich following months of protests.

The Russian foreign ministry said it was "deeply concerned" by what it said were reports of casualties in Eastern Ukraine, though it was unclear where any such incidents had taken place.

A spokesman for U.S. President Barack Obama said Ukraine's government was obliged to respond to "provocations" in the east but Washington was not considering sending arms to Kiev.

It was "seriously considering" adding to sanctions imposed after the annexation of Crimea, the White House said, although the State Department said such action was unlikely before a meeting in Geneva on Thursday at which U.S., EU and Ukrainian officials will try to persuade Russia to defuse the situation.

SHARES FALL

The reports of military action in eastern Ukraine caused Russian shares to fall sharply, with the main Moscow indices down about three percent.

Russian Prime Minister Dmitry Medvedev gave a gloomy assessment, apparently referring to the deaths of at least two people on Sunday when Kiev unsuccessfully tried to regain control in Slaviansk, 150 km (90 miles) from the Russian border. "Blood has once again been spilt in Ukraine. The country is on the brink of civil war," he said on his Facebook page.

Putin told U.N. Secretary General Ban Ki-moon that Ukrainian actions in the east were "anti-constitutional." A Kremlin statement quoted him as saying he expected the U.N. and world powers to issue a "clear condemnation" of Kiev.

Turchinov said an offensive he first announced on Sunday was now in progress after days in which it failed to materialise. "The anti-terrorist operation began during the night in the north of Donetsk region. But it will take place in stages, responsibly, in a considered way," he told parliament. "I stress again: The aim of these operations is to defend the citizens ofUkraine."

At least 15 armoured personnel carriers displaying Ukrainian flags were parked by the side of a road around 50 km (30 miles) north of Slaviansk, witnesses said.

Ukrainian troops wearing camouflage gear and armed with automatic weapons and grenade-launchers were stationed nearby, with a helicopter and several buses containing interior ministry personnel near the road.

In Slaviansk itself, separatists have seized the local headquarters of the police and state security service.

BARRICADES

Outside the police station, about a dozen civilians manned barricades of tyres and wooden crates. A dozen or so armed Cossacks - paramilitary fighters who claim descent from Tsarist-era patrolmen - stood guard at the mayor's offices. Shops were functioning as usual and bread supplies were normal.

In Kiev, a radical, pro-Russian candidate running for Ukrainian presidential elections due next month was beaten up by an angry crowd.

Moscow accuses Kiev of provoking the crisis by ignoring the rights of citizens who use Russian as their first language, and has promised to protect them from attack.Russia also stresses the presence of far-right nationalists among Kiev's new rulers.

However, a United Nations report on Tuesday cast doubt on whether Russian-speakers were seriously threatened, including those in Crimea who voted to join Russia after Moscow forces had already seized control of the Black Sea peninsula.

"Although there were some attacks against the ethnic Russian community, these were neither systematic nor widespread," said the report by the U.N. human rights office.

Russia called the report one-sided, politicised and apparently fabricated.

NATO Secretary-General Anders Fogh Rasmussen accused Moscow of involvement in the rebellions. "It is very clear that Russia's hand is deeply engaged in this," he told reporters.

Russian Foreign Minister Sergei Lavrov denied that Moscow was stirring up the separatists in the east and southeast as a possible prelude to repeating its annexation of Crimea. "Ukraine is spreading lies that Russia is behind the actions in the southeast," Lavrov said on a visit to China.

Moscow has demanded constitutional change in Ukraine to give more powers to Russian-speaking areas, where most of the country's heavy industry lies, while the rebels have demanded Crimean-style referendums on secession in their regions.

Kiev opposes anything that might lead to the dismemberment of the country. But in an attempt to undercut the rebels' demands, Turchinov has held out the prospect of a nationwide referendum on the future shape of the Ukrainian state.

REVERSE FLOWS

The crisis has also prompted fears that Moscow might turn off gas supplies to Kiev, disrupting flows to the European Union. Russian exporter Gazprom promised it would remain a reliable supplier to the EU, but German energy company RWE began deliveries to Ukraine on Tuesday - reversing the usual east-west flow in one central European pipeline.

Central Europe's pipeline network is designed to carry Russian gas westwards. But Polish operator Gaz-System said it had reversed the flow to send back 4 million cubic metres per day, the equivalent of 1.5 billion annually - a modest volume compared with Ukraine's need for more than 50 billion.

Moscow has nearly doubled the price it charges Kiev this year, and Putin has threatened to halt supplies if Kiev does not repay more than $2 billion it owes to Gazprom. Putin has also warned EU leaders that this could disrupt their supplies that flow across Ukraine.

Ukrainian state energy company Naftogaz said it was ready to pay in full for imported gas from Russia at $268.5 per 1,000 cubic metres, rather than the $485Moscow has demanded, which is more than it charges rich Western countries for its gas.

(Additional reporting by Richard Balmforth, Conor Humphries and Serhiy Karazy in Kiev, Alessandra Prentice and Alexei Anishchuk in Moscow, Ben Blanchard in Beijing, Adrian Croft in Luxembourg and Tom Miles and Stephanie Nebehay in Geneva; Writing by Giles Elgood; Editing by Peter Graff, Alastair Macdonald and Cynthia Osterman)