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Ukraine leader to sign EU accord as rebels free OSCE observers

Ukraine's new Western-backed leader is set to sign an historic EU agreement on Friday pulling his country out of Moscow's reach as pro-Russian rebels freed four OSCE observers after 31 days in captivity.

KIEV: Ukraine's new Western-backed leader is set to sign an historic EU agreement on Friday pulling his country out of Moscow's reach as pro-Russian rebels freed four OSCE observers after 31 days in captivity.

In the rebellious region of Donetsk, the four members of the Organisation for Security and Cooperation in Europe's mission in east Ukraine arrived at a hotel in the early morning hours.

Looking tired and tense, they declined to speak with journalists. Four more kidnapped OSCE observers are still being held.

The accord with the European Union that President Petro Poroshenko will sign in Brussels nudges Ukraine toward eventual membership in the bloc and puts it firmly out of Russia's orbit.

The EU agreement lies at the heart of the conflict on the eastern edge of Europe that pits the Kremlin against Western powers and ethnic Russians against Ukrainian speakers in the splintered but strategic nation.

The West is currently scrambling to salvage a temporary ceasefire and nascent peace talks which pro-Russian militias that control large swathes of the industrial east.

On Thursday, Poroshenko extended the truce -- broken on repeated occasions but still having succeeded in tempering the worst of the violence in the Russified eastern rustbelt -- for a few hours until Friday at 1900 GMT.

Kiev and separatist commanders have also set up a third round of indirect negotiations in the eastern hub of Donetsk that could agree another extension.

"I am ready to make peace with anybody," Poroshenko told CNN.

"I hate the idea of not to use the last opportunity to bring peace to the region," the 48-year-old chocolate baron added in English.

Poroshenko observed that Russian leader Vladimir Putin's position is sometimes "very pragmatic. Sometimes it is very emotional. I try to find the time when he is more pragmatic than emotional."

The Kremlin for its part said Putin assured German Chancellor Angela Merkel that he fully backed the resumption of meaningful dialogue between the warring sides.

The east witnessed sporadic fighting throughout the day Thursday that included a rebel attack on an irregular troops unit stationed in the heart of Donetsk. The National Guard said none of its personnel had been killed or wounded.

In Donetsk, a pro-Russian separatist leader announced the freeing of four OSCE observers who had been kidnapped by rebels in east Ukraine on May 26.

"They have been freed without conditions. They are a Dane, a Turk, a Swiss national and I believe an Estonian," said Oleksandr Borodai, the "prime minister" of the self-proclaimed Republic of Donetsk, which has declared independence from the Kiev government after a disputed referendum.

He said they had been held by a rebel chief in the neighbouring restive region of Lugansk.

While welcoming the release, Mark Etherington of the OSCE mission in Ukraine said the security body was still "very worried" about the fate of the second team of observers held since May 29 in eastern Ukraine by the pro-Moscow separatists.

Rebel leaders for their part claim that they do not control the actions of all the militias in their region fighting against the Ukrainian forces sent to curb the insurgency.

The 11-week insurgency has killed more than 435 people and shattered the delicate system of trust that had developed between Moscow and the West since the Cold War.

Putin is strongly suspected of orchestrating the Ukrainian uprising after seizing the Crimean peninsula in reprisal for the February ouster of a Moscow-backed president in Kiev.

The Kremlin chief denies exerting control over the fighters and is yet to address in public reports of rocket launchers and even tanks crossing the Russian border into the conflict zone.

"It is critical for Russia to show in the next hours, literally, that they are moving to help disarm the separatists, to encourage them to disarm, to call on them to lay down their weapons and to begin to become part of a legitimate process," US Secretary of State John Kerry said.

Kerry warned sanctions would also be discussed by EU leaders after they sign the Association Agreement with Ukraine that the old regime rejected at what proved to be its own cost.

The punitive measures would target Russia's financial and defence sectors at a time when its export-dependent economy is on the verge of slipping into another recession.

But the US State Department later played down the link between Kerry's comments and the looming sanctions threat.

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