For the first time since the crisis in Ukraine began, Ukrainian and Russian ministers met on Tuesday in an attempt to defuse the military standoff in the Crimean peninsula.
News of the meeting was announced by Ukraine's new Prime Minister Arseny Yatseniuk, though its location was not revealed.
In another development, Ukraine said on Tuesday that observers from a pan-European security body would travel at its invitation to the Crimea region, where Russian forces have taken control.
"An OSCE mission has arrived in Kiev and will go to the Crimean peninsula to monitor the situation," Ukraine's national security chief, Andriy Paruby, told a news conference in Kiev.
The Organization for Security and Cooperation in Europe is a pan-European forum for security issues that was set up during the Cold War.
Russian President Vladimir Putin ordered troops involved in a military exercise in western Russia back to base on Tuesday and said that any use of force in Ukraine would be "a last resort," helping to ease East-West tension over fears of war.
But forces loyal to Moscow remain in control of Crimea, which was seized bloodlessly after Russian ally Viktor Yanukovich was ousted as Ukrainian president last month, and are surrounding military compounds of the Ukrainian army and navy.
According to various estimates, there are currently some 20,000 Russian soldiers in Crimea, despite Putin's assertion in a press conference on Tuesday that they were local self-defense units who, he suggested, may be wearing commercially available surplus uniforms from the Russian army.
The troops continued to take control of strategic points on Tuesday and to quarantine Ukrainian army bases in which soldiers loyal to Kiev were hunkered down. The presence of Russian soldiers on the streets of the large Crimean cities was smaller than it had been in preceding days and there were no reports of movement among the advance forces which took up positions on the land bridge between Crimea and eastern Ukraine on Monday night.
Putin's order to the troops on maneuvers along the Ukrainian border to return to base has reduced the concern that they would be used for an invasion of eastern Ukraine.
In tandem with its military moves, Moscow increased the pressure on Kiev by announcing that it would no longer sell Ukraine natural gas at reduced prices, due to Ukraine's $2 billion debt to Russia's national gas company Gazprom.
That debt could be covered by emergency assistance from the European Union and the United States, which is currently under discussion.
Additional pressure was provided by the government newspaper Izvestia, which published a detailed article on the how a Russian invasion of Ukraine and the occupation of the entire country could be accomplished.
Continued and often violent pro-Russian demonstrations continued in the large cities of eastern Ukraine, including Donetsk, increasing concern in Kiev that Russian is continuing to incite provocations that could justify a wider campaign.
On Tuesday night, Russian and Kazakh troops conducted a joint exercise during which an inter-continental ballistic missile was fired from a site on the Caspian Sea to a target in Kazakhstan. Washington received prior warning of the missile test.
In Kiev, visiting U.S. Secretary of State John Kerry rejected comments made earlier by Putin, who said Moscow had a right to protect its people in Ukraine. “We condemn the Russian federation’s act of aggression,” Kerry said, describing their troop movements as a military invasion of Ukraine.
"The United States reaffirms our commitment to Ukraine's sovereignty and territorial integrity according to international law. We condemn the Russian Federation's act of aggression," Kerry told a news conference.
"It is clear that Russia has been working hard to create a pretext for being able to invade further," he said.
A senior U.S. administration official, who briefed reporters en route to Kiev, said the Obama administration would work with Congress to approve $1 billion in loan guarantees to help lessen the impact on Ukrainians of proposed energy subsidy cuts.
The United States will also send technical experts to Ukraine to advise its central bank and finance ministry on how to deal with the country's economic challenges and help combat corruption, the official said.
Putin told a press conference earlier in the day that Russia reserved the right to use all options in Ukraine to protect compatriots living in "terror" but that Moscow would use force only as a last resort.
In his first remarks to reporters since the crisis erupted, Putin blasted the coup in Ukraine as unconstitutional and said that Viktor Yanukovych was still the country's legitimate president even though he had fulfilled all conditions of Feb. 21 agreement with the opposition and effectively given up all power.
Putin also said that Russia would "of course" provide financial aid to the embattled region of Crimea.
In other developments:
The prime minister of Crimea said on Tuesday that most Ukrainian military units on the peninsula had surrendered and pledged allegiance to his pro-Russian government, and that local officials were working to speed up a referendum on independence.
Speaking at a news conference Tuesday, Prime Minister Sergei Aksyonov said regional officials were in control of the security situation, even as armed standoffs continued between Russian forces and Ukrainian troops at several military installations.
Ukraine’s border guard service said two Russian navy ships have blocked off both ends of a strait that separates Russia and the Crimea region. Ukrainian border guards say Russian armored vehicles were spotted on the Russian side of the Kerch Strait, but the Russian military has not confirmed the sightings.
In Ankara, Turkey’s Air Force revealed that it scrambled eight F-16 fighter jets on Monday after a Russian surveillance plane flew parallel along its Black Sea coast. A statement posted on the website of Turkey’s military General Staff said the Russian plane remained in international airspace.
In Rome, former Ukrainian prime minister Yulia Tymoshenko called on Western powers to impose sanctions on Russia after Moscow said on Tuesday that sending troops into its neighbor was a possibility.
"Diplomatic efforts are not enough; I think what must be done is to impose economic sanctions on Russia. Especially if there is a further escalation of violence," Tymoshenko said in an interview with SkyTG24.
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