Munich (Germany) (AFP) - Western leaders challenged Russian President Vladimir Putin Saturday to prove he wants peace in Ukraine, warning both sides a new Franco-German peace drive may be a "last chance" to stop all-out war.

In a dramatic gesture at a gathering of world leaders in Germany, Ukraine President Petro Poroshenko brandished passports and military ID cards he said were captured from Russian soldiers deep inside the country, offering what he said was "evidence" of Russia's presence in the country.

"Today a former strategic partner is waging a hidden war against a sovereign state," he said at the Munich Security Conference (MSC).

Poroshenko was due Sunday to discuss the new initiative in a phone call with German, French and Russian leaders, as fresh fighting in the former Soviet republic claimed 12 more lives and Kiev warned the Russian-backed separatists were planning a new offensive.

German Chancellor Angela Merkel set the conference agenda as she championed a last-ditch peace plan she and French President Francois Hollande took to Putin in Moscow late Friday.

"It is uncertain whether it will lead to success, but from my point of view and that of the French president it is definitely worth trying," she said.

Later German Foreign Minister Frank-Walter Steinmeier told German television the fate of the join European push would be known in "two or three days."

US Vice President Joe Biden voiced both support and scepticism, saying: "Given Russia's recent history, we need to judge its deeds not its words. Don't tell us, show us, President Putin!"

"Too many times President Putin has promised peace and delivered tanks and troops and weapons".

Hollande said the stakes could not be higher, warning that the new peace plan was "one of the last chances" to halt the 10-month-old conflict.

"If we fail to find a lasting peace agreement, we know the scenario perfectly well -- it has a name, it is called war."





- 'Allow Ukraine to defend self' -

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While Western leaders were united in condemning Russia for supporting rebels, they differed on whether to back Ukraine's beleaguered army with weapons, although a US official denied to reporters that there was any split between the transatlantic allies. "There is not a rift about this," the official told reporters.

Momentum has built in Washington for giving Kiev high-tech military equipment, but Merkel insisted such a step would only make matters worse.

"I can't conceive of a situation where better armaments for the Ukrainian army would so impress President Putin that he believes he will militarily lose," she said.

Biden, however, insisted Ukraine had the right to defend itself and pledged that Washington, which has so far provided non-lethal military equipment such as armoured vests and helmets, would stick by Kiev.

"We will continue to provide Ukraine with security assistance. Not to encourage war but to allow Ukraine to defend itself," he said.

"Let me be clear: we do not believe there is a military solution in Ukraine. But let me be equally clear: We do not believe Russia has the right to do what they're doing."





- 'There's no war' -





Putin, meanwhile, said Russia was not at war and does not want war with anyone but lashed out at Western sanctions imposed as the Ukraine crisis has deepened.

"There's no war, thank God. But there is definitely an attempt to curb our development," Putin said in a TASS news agency report.

In Munich, his Foreign Minister Sergei Lavrov said he believed the new peace plan could help end the conflict, all the while charging the US and EU with having escalated the conflict at every turn.

"These talks will continue as you know; we believe there is every possibility that we will reach a result and agree the recommendations that will allow the sides to really untie this knot of a conflict," Lavrov said.





- 'Fresh tanks, rocket launchers' -





Far from the diplomatic exchanges, fighting raged in eastern Ukraine, where some 5,400 people have been killed since the start of the conflict in April.

Rebels are "accumulating forces for further offensive operations on Debaltseve and Mariupol," the Ukraine government said.

It said the separatists were sending fresh tanks, armoured personnel carriers and multiple rocket launcher systems to the Debaltseve region and Granitne, around 35 kilometres (20 miles) northeast of the city of Mariupol.

The town of Debaltseve -- mid-way between rebel centres Donetsk and Lugansk -- has been the focus of fierce fighting for over a week as insurgents try to encircle government troops holding the strategic railway hub.

Separatist fighters in January fired rockets at the strategic government-held port of Mariupol, whose capture could open up a land bridge from Russia to Crimea.

According to Ukrainian online news site theinsider.ua, Merkel and Hollande proposed that Kiev withdraw from Debaltseve in exchange for rebels pulling back from near Mariupol.

A senior State Department official said the new initiative was based on the September ceasefire deal reached in Minsk, but would include some timings by which such things as a ceasefire should happen. But the official admitted the initiative was still "very much in flux and evolution."

Hollande told France 2 television that the plan proposes the creation of a 50- to 70-kilometre (31- to 43-mile) demilitarised zone based around the current frontline.

The Americans have insisted all sides must lay down arms as the first step towards any deal.