Channel NewsAsia

Kiev accuses Russia of seeking 'third world war'

Kiev accused Moscow of seeking to set off a "third world war" by stoking border tensions, after a Russian military drill sparked stark warnings from the United States.

KIEV: Kiev accused Moscow of seeking to set off a "third world war" by stoking border tensions, after a Russian military drill sparked stark warnings from the United States.

US Secretary of State John Kerry said the Kremlin was making an "expensive mistake" by meddling in Ukraine and a downgrade to one notch above junk of its credit rating suggested Moscow was already feeling the pinch.

The situation on the ground was calm but tense Friday, a day after the Ukrainian army staged a brief but dramatic incursion into Slavyansk, an eastern town held by pro-Russian rebels.

"Everything was calm overnight, thank God," said one relieved insurgent in front of the occupied town hall. "No checkpoint in Slavyansk was attacked."

On Thursday, Ukrainian armoured vehicles backed by commandos on foot entered the town, killing one rebel and wounding another, and destroying three roadblocks.

A photo of the killed 22-year-old man was placed in front of the town hall on Friday.

Russia was enraged by the operation, ordering battalions among the tens of thousands of troops it has massed on Ukraine's border to conduct a new military "exercise" in response.

Ukrainian Prime Minister Arseniy Yatsenyuk accused Russia of trying to trigger a global conflict.

"The world hasn't forgotten the Second World War and Russia wants to start a third world war," he said.

"Russia's support for the terrorists in Ukraine constitutes an international crime and we call on the international community to unite against the Russian aggression."

Washington, a key supporter of the new leadership that toppled Ukraine's old pro-Kremlin regime in February, escalated the rhetoric against its former Cold War foe.

Kerry late Thursday warned that Russia's refusal to take any steps to end the crisis would prove costly, saying the window for Moscow to change course was closing.

He accused Moscow of a "full-throated effort to actively sabotage the democratic process through gross external intimidation" and described the latest Russian drills as "threatening".

"Let me be clear: if Russia continues in this direction it will not just be a grave mistake, it will be an expensive mistake," he said, adding "we are ready to act" as Washington tees up new economic sanctions against Moscow.

Ukraine's acting President Oleksandr Turchynov has vowed to push on with the offensive to put down the rebellion in the east.

"We will not back down from the terrorist threat," Turchynov said in a televised address, telling Russia to stop interfering in Ukraine's internal affairs.

The rocketing tensions sent oil prices up, as US President Barack Obama, who has deployed troops to boost NATO's defences in eastern European states, also accused Russia of reneging on a Geneva agreement to defuse the crisis.

Russian Foreign Minister Sergei Lavrov in turn attacked the United States and the European Union of "trying to use Ukraine as a pawn in a geopolitical game".

UN chief Ban Ki-moon warned the crisis threatened to "spin out of control" and urged all sides to "refrain from violence".

Thursday's assault on Slavyansk followed two other clashes in east Ukraine.

The defence ministry said an army base in Artemivsk had also repelled an assault by around 100 separatists. One soldier was wounded.

And in the port city of Mariupol, Interior Minister Asen Avakov said special forces retook the occupied town hall with no casualties.

The violence was the worst to erupt since a deal done in Geneva a week ago between Kiev, Moscow and the West aimed at defusing tensions.

Russian President Vladimir Putin warned there would be "consequences" upon learning of the Slavyansk assault.

His Defence Minister Sergei Shoigu claimed that Ukraine had mobilised 11,000 troops, 160 tanks and gangs of extremists "against peaceful civilians".

"If this war machine is not stopped today, then it will lead to a large number of dead and wounded," he said.

Obama accuses Moscow of failing to abide by the Geneva deal, which required militias to disarm and cede control of seized buildings.

Kiev, he said, had sought to enact the accord by pledging an amnesty for the rebels, and to protect the Russian language and decentralise power.

The United States has threatened fresh sanctions on top of ones already targeting Putin's inner circle and a key Russian bank if the situation further escalates.

The Standard and Poor's rating agency downgraded Russia's debt by one notch to the lowest investment grade Friday and kept its outlook negative, citing a risk of increased capital flight.

It said that increased isolation resulting from even tighter sanctions could lead to another downgrade.

Moscow, though, has defiantly said it could withstand any sanctions and brandished the threat of similar retaliation if more were imposed.

While Obama has ruled out sending US or NATO forces into Ukraine, Washington has begun deploying 600 US troops to boost NATO's defences in nearby eastern European states.

France also said it was sending four fighter jets to join NATO air patrols over the Baltic states.

Tweet Photos, Videos and Update on this Story to  #cna