US warns Russia of punishing new sanctions

Ukrainian soldiers and police take position at checkpoint near Slavyansk The United States warned Russia of punishing new sanctions if the Kremlin and its allies in Ukraine disrupt crucial presidential elections in the former Soviet republic less than 10 days away. Kiev's interim leaders are battling to keep Ukraine from disintegrating ahead of the May 25 vote, pressing on with a military offensive to put down a bloody pro-Moscow insurgency in the eastern industrial heartland.
"Our message is really, quite simple: 'Let Ukraine vote. Let the Ukrainian people choose their future'," US Secretary of State John Kerry said at a meeting with European counterparts in London.
He said the separatists who have seized over a dozen towns in a month of fighting and declared independence in two industrial regions in defiance of Kiev and the West were "sowing mayhem".
"Far from defending the rights of the people in the east they are seeking to speak for everybody through the barrel of the gun," Kerry told reporters.
He said the United States and its European allies would impose sectorial sanctions "if Russia or its proxies disrupt the elections".
- Ukraine army in action -
The tough talk came as Ukraine pressed on with a military operation against rebels around Slavyansk, the epicentre of the uprising, despite the launch of "national unity" talks in Kiev on Wednesday.
The round-table discussions are part of a initiative launched by the pan-European OSCE to try to resolve the escalating crisis on Europe's doorstep.
Crucially however, the rebels were not invited despite Western calls for inclusive talks, and no progress was reported.
The east of Ukraine remains on edge, with fighting flaring almost every night around rebel flashpoints and reports -- difficult to confirm -- of attacks on election centres and government officials.
Around Slavyansk, Ukrainian forces have set up control posts with tanks and armoured vehicles backed up by helicopters and anti-aircraft guns to try to seal off the rebel-controlled city.
"We are defending ourselves against the separatists who constantly attack us with automatic weapons, rifles and grenade launchers," one National Guard officer told AFP.
Ukraine's central bank also said it was forced to close its branch in the main eastern city of Donetsk and evacuate staff after being threatened by separatists demanding money.
Dozens of people have been killed in the southeast since mid-April as government troops battle to dislodge the insurgents.
Fears are growing that Ukraine could tear apart after rebels declared "sovereignty" in Donetsk and neighbouring Lugansk following weekend referendums branded illegitimate by Kiev and the West.
- 'Scalpel rather than hammer' -
Interim President Oleksandr Turchynov has said his administration is ready to reach out to pro-Russians in the east but that the separatists must first lay down their arms.
Turchynov is to meet EU Enlargement Commissioner Stefan Fuele on Friday while Polish Foreign Minister Radoslaw Sikorski will discuss the crisis with his Ukrainian counterpart Andriy Deshchytsya and Turchynov.
In a bid to pressure the Kremlin, President Barack Obama has already drafted an executive order for sanctions across key sectors such as banking, energy, defence and mining, adding to punitive measures already imposed by Washington and Brussels.
"There are a lot of things we can do to create bleeding," a US official said, adding that the aim was "to use a scalpel rather than a hammer".
Western leaders see the May 25 vote as crucial for the future of Ukraine after Russia's much criticised annexation of Crimea in March, which plunged relations between Moscow and the West to their lowest point since the Cold War.
President Vladimir Putin said last week Russia had withdrawn its estimated 40,000 troops from the border, but the West says it has seen no sign of a major pullback.
With tensions running high, a French reconnaissance vessel and a US destroyer entered the Black Sea on Thursday, boosting the international ship presence in the area, Bulgarian media reports said.
Russia and Europe are also locked in a dispute over Ukraine's gas debt after Moscow threatened to turn off the taps if Kiev fails to pay a $1.6 billion bill by early June.
Putin said Thursday Russia was still open to talks on the issue but complained that Brussels had failed to make any specific proposals.
European Commission spokeswoman Pia Ahrenkilde-Hansen said however that Putin's "criticism is ... unfounded", as talks between Russia, Ukraine and the EU have been held at different levels.
Another meeting between the EU's energy commissioner and Russia's energy minister is due to be held Monday in Berlin, she added.
Nearly 15 percent of all gas consumed in Europe is delivered from Russia via Ukraine, which is facing further economic gloom despite a $17 billion IMF aid package.
- 'Uphill struggle' -
The International Crisis Group think-tank said the Kiev government, set up in February after months of pro-EU protests triggered the ouster of the Kremlin-backed administration, faced an "uphill struggle" to make it to the election.
It said the "weak" interim leadership -- often depicted as fascists by Moscow -- appeared incapable of keeping order in the southeast and called on it to urgently reach out to the people there to listen to their demands for minority rights and self-government.
The Organisation for Security and Cooperation in Europe roadmap calls for "restraint from violence, disarmament, national dialogue, and elections".
While voicing support for the OSCE plan, the Kremlin insists Kiev first halt so-called "reprisal raids" against the separatists and hold talks on rights for Russian speakers.
Moscow has however rolled back its vehement opposition to the election, with the speaker of the State Duma describing it as "the lesser of two evils".
Source: AFP