Ukraine tensions rise as Kiev stops funding rebel areas

Kiev is ready to stop funding rebel-held eastern Ukraine, putting pressure on separatist leaders and their Russian backers to support millions of people through winter, as fears grow of a renewed surge in hostilities.

After Ukraine's president Petro Poroshenko asked parliament to quash a law giving broad autonomy to Donetsk and Luhansk regions, and ordered the military to reinforce areas near rebel territory, the government said yesterday it was sick of financing the "imposters and conmen" running swathes of the two provinces.

"As soon as the terrorists clear out of there . . . we will pay every person the welfare payments they have the right to," said prime minister Arseniy Yatsenyuk. "To pay today is to directly finance terrorism. The terrorists should get out of this territory and Russia should stop supporting them."

Fatalities exceed 4,000

Before the conflict began in April, the coalmining and industrial regions of Donetsk and Luhansk were home to about seven million people. Fighting has killed over 4,000 and driven about one million from their homes, and many who remain have not been paid wages or benefits for months, although some state workers have continued to receive salaries.

Mr Yatsenyuk said Kiev would withhold some $2.6 billion (€2.1 billion) that would be “stolen by Russian bandits” if dispatched to the east. He made clear that gas and electricity supplies would continue, however, just as Mr Poroshenko insisted earlier that humanitarian aid would still flow to militant-controlled territory.

"Our citizens are on this territory and the government will not allow these people to freeze, because this would lead to humanitarian catastrophe," Mr Yatsenyuk said. Moscow and the rebels accuse

Kiev of launching a “punishment operation” against the mostly Russian-speaking population of Donetsk and Luhansk, and many locals are scared and angry over deadly Ukrainian military shelling of the regions.

Even residents of the provinces who broadly support Kiev’s new pro-western government feel it now sees people still living there as complicit in the insurgency, and they fear a renewal of all-out fighting.

Two teenagers were killed and four injured when a shell hit a Donetsk school playing field yesterday.

Daily clashes have continued despite a September 5th ceasefire agreement, and military spokesman Andriy Lysenko said yesterday two soldiers had been killed and nine hurt in 24 hours of "intensified" shooting.

He also accused Russia of sending more weapons and fighters to the rebels, a day after Nato said Moscow was again deploying troops to Ukraine's border.

Kiev said last Sunday’s rebel elections and Russia’s recognition of them broke the terms of the ceasefire deal, while separatist leaders claimed Mr Poroshenko’s annulment of the law on broad autonomy effectively “cancelled” the agreement.

Further sanctions

Russia and the West accuse each other of fomenting Ukraine’s crisis, and the EU and US have threatened to impose more sanctions on Moscow if it fails to help resolve the conflict.

Jean-Claude Juncker said yesterday his first bilateral talks outside the EU as new European Commission chief would be in Ukraine, but he did not say when he would visit.