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Russia accuses US of "Iron Curtain" policies in Ukraine showdown

Moscow on Tuesday accused Washington of bringing back "Iron Curtain" policies in the fierce showdown over Ukraine, while the West revealed its new sanctions included measures against Russia's military chief.

MOSCOW: Moscow accused Washington of bringing back "Iron Curtain" policies in the showdown over Ukraine on Tuesday, as the West slapped fresh sanctions against key figures including Russia's military chief.

The Russian foreign ministry warned the sanctions were "absolutely counterproductive" and were driving the crisis towards "a dead end".

The sharp language underlined the Cold War echoes of the crisis swirling around Ukraine, which has opened diplomatic and economic fronts between East and West.

The increasing geopolitical tensions were doing nothing to ease the situation on the ground in east Ukraine, where sporadic violence was unabated and negotiations to free seven OSCE inspectors held by rebels continued.

A Russian deputy foreign minister, Sergei Ryabkov, tore into the United States for leading the sanctions charge on Monday, especially for its decision to curb hi-tech exports to Russia that could have military uses.

"All of that is a blow to our high-tech enterprises and industries," Ryabkov said in an interview with online newspaper Gazeta.ru.

"This is a revival of a system created in 1949 when Western countries essentially lowered an 'Iron Curtain', cutting off supplies of high-tech goods to the USSR and other countries."

Russia's foreign ministry also slammed the European Union for "doing Washington's bidding with new unfriendly gestures towards Russia".

The EU on Tuesday revealed that General Valery Gerasimov, chief of the general staff of Russia's armed forces and the country's deputy defence minister, was one of 15 Russians and Ukrainians targeted by a new asset freeze and travel ban.

The EU's top foreign policy official, Catherine Ashton, announced the measure in a statement expressing alarm at "the downward spiral of violence and intimidation" in Ukraine.

The EU blacklist was part of a Group of Seven sanctions assault against Moscow led by Washington on Monday, when the White House slapped sanctions on seven Russian officials and 17 companies close to President Vladimir Putin.

Canada has targeted nine people and two banks, while Japan said it was denying visas to 23 targeted Russians.

Russia has vowed "painful" retaliation against Washington for the coordinated sanctions.

"We already have something and something will be introduced shortly," said Ryabkov.

Ukraine and EU countries dependent on Russian gas were worried a reprisal could hit the vital energy supply.

For all the outrage from Moscow, there was no sign that the sanctions were having an immediate effect on getting Russia to use its influence to defuse the crisis in Ukraine.

Kalashnikov-toting militants on Monday seized the town hall of Kostyantynivka -- the latest of more than a dozen towns held by pro-Russian rebels.

Fourteen people were also seriously hurt when pro-Moscow militants wielding bricks, bats and knives attacked their march for Ukrainian unity in the city of Donetsk.

And a mayor in east Ukraine's biggest city of Kharkiv, Gennady Kernes, was shot in the back by an unknown gunman, leaving him in a critical condition.

Kernes, who is Jewish, was flown on Tuesday to Israel for medical treatment, his spokesman said. It was not known if the shooting was linked to the political crisis.

Russia, which has massed tens of thousands of troops on the border with Ukraine, has repeatedly said it has no plans to invade the ex-Soviet republic.

Russian Defence Minister Sergei Shoigu repeated that assurance in a telephone conversation with his US counterpart Chuck Hagel, the Pentagon said.

Shoigu again denied US accusations that covert Russian forces were already deployed in Ukraine to sow unrest, and urged Washington to tone down its rhetoric on the crisis.

Hagel in turn called for an end to Russia's "destabilising influence inside Ukraine and warned that continued aggression would further isolate Russia and result in more diplomatic and economic pressure".

The US defence secretary also asked for Moscow's help in securing the release of the seven OSCE inspectors held by pro-Russian militants in Slavyansk.

An AFP journalist in Slavyansk said early Tuesday there was still no sign of the captive inspectors leaving the occupied town hall, where they were being kept under armed guard.

The OSCE has been negotiating for several days to free the seven Europeans, who were seized on Friday. An eighth inspector, a Swede, was released on Sunday because he suffers from diabetes.

The local rebel leader has given the OSCE a list of pro-Russian militants detained by Ukrainian authorities he demands be freed in a prisoner swap.

Kiev's soldiers are surrounding the flashpoint town in a bid to prevent reinforcements reaching militants there.

Washington insists Moscow is behind the insurgency in Ukraine and US President Barack Obama has warned of "still greater costs" on Russia if it does not cease its "illegal intervention".

The fresh Western sanctions are a response to Russia's perceived failure to implement an April 17 deal struck in Geneva to defuse the crisis by disarming militias and having them vacate occupied public buildings.

"Russia has so far failed to implement any part of the Geneva agreement," said British Foreign Secretary William Hague, who plans to visit Ukraine as well as Moldova and Georgia next week.

Among those targeted by the US sanctions is the president of Rosneft, Russia's top petroleum company and one of the world's largest publicly traded oil companies.

Standard and Poor's swiftly cut its credit ratings for Rosneft and Russian state gas giant Gazprom.

The EU said talks with Russia and Ukraine will take place in Warsaw on Friday to try resolve a US$3.5 billion gas bill Gazprom calculates Kiev owes. Putin has threatened to cut off the gas flow to Ukraine if it is not quickly paid.

The crisis has accelerated since November, when pro-Western protesters in Kiev demonstrated against Kremlin-backed then-president Viktor Yanukovych after he rejected an agreement to bring Ukraine closer to the European Union.

After four months of protests that turned deadly, Yanukovych was forced from power.

In response, Moscow launched a blitz annexation of the peninsula of Crimea and stepped up troop deployments on the border.

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