Obama says more sanctions against Russia ‘teed up’

US president Barack Obama said today more sanctions were "teed up" against Russia if it does not deliver on promises in an agreement in Geneva last week to ease tensions in Ukraine.

"So far at least we have seen them not abide by the spirit or the letter of the agreement in Geneva," he said at a joint news conference after a meeting with Japanese prime minister Shinzo Abe.

“We have prepared for the possibility of applying additional sanctions,” he said.

He said that Russia could avoid further sanctions by changing course but that the evidence so far had not left him hopeful that Moscow would do so.

“There’s always the possibility that Russia, tomorrow, or the next day, reverses its course and takes a different approach,” he said.

Yesterday Ukraine claimed to have “liberated” one eastern town from pro-Kremlin rebels, in defiance of a call from Moscow to withdraw forces and a warning that it would respond if Russian citizens or interests in the area were attacked.

“Currently Svyatogorsk and its surroundings are patrolled by police,” Kiev’s interior ministry said last night.

“During an anti-terrorism operation by special forces, the town was liberated.” In keeping with a confusing and hapless “anti-terrorism” operation, however, reporters saw no sign of troops in Svyatogorsk, and locals said it had never been seized by gunmen opposed to Kiev’s new pro-western government.

Ukrainian officials noted the town’s “strategic location”, however. It is only about 30km north of the rebel stronghold of Slovyansk, a city bristling with weapons that allegedly plays host to a small, secret contingent of Russian forces.

Meanwhile, the body of Ukrainian town councillor Volodymyr Rybak, who was last seen a week ago being bundled into a car by masked men in camouflage after he tried to remove the flag of pro-Russian rebels from the town hall in Horlivka, has been identified.

Mr Rybak’s body was found on the bank of a river that runs through the depressed industrial region of Donetsk, with that of another man who is yet to be identified. Police said they drowned after being tortured and thrown into the water unconscious but alive.

The killings have tightened a knot of fear in the heart of eastern Ukraine, where masked militants control several towns, cities and roads, apparently with covert support of Russian special forces or former servicemen.

Kiev says Moscow’s agents are working with criminal elements to destabilise the region or even separate it from Ukraine, and accuse this alliance of using terror tactics to cow the local population and silence coverage and criticism of its actions.

Ukraine's security service said Igor Strelkov and Igor Bezler, allegedly current and former lieutenant colonels of Russian military intelligence respectively, were behind Mr Rybak's murder. In the early hours of last Sunday, three men guarding a rebel checkpoint near the militant stronghold city of Slovyansk were shot dead, shattering an Easter "truce".

Moscow and the rebels blamed Right Sector, a nationalist group that has become the stuff of nightmares in eastern Ukraine, largely through its depiction by Kremlin-controlled media as a band of murderous, Russian-hating fascists.

The organisation denied any involvement in the killings, and Kiev accused Russia’s agents of carrying out the murders to stoke tension and fear.

Already set on edge by the appearance of road blocks and hundreds of men in camouflage and masks, many openly carrying guns and knives, eastern Ukraine is now in danger of slipping into a cycle of bloodshed.

Officials say violent crime has surged with the proliferation of guns, many of which were taken by militants from police and security service buildings.

At least four Ukrainian journalists were missing last night, and believed to be held in Slovyansk, where US reporter Simon Ostrovsky was spending a second evening in captivity.

Additional reporting Reuters