Ukrainian President Petro Poroshenko has signed up to a trade and economic pact with the European Union on Friday, saying it may be the "most important day" for his country since it became independent from the Soviet Union.

Russia's Deputy Foreign Minister Grigory Karasin quickly responded, saying there will be "grave consequences" for Kiev's signing of the dead, Interfax news agency reported.

The European Union signed similar association agreements with two other former Soviet republics, Moldova and Georgia.

Businesses in the three countries whose goods and practices meet EU standards will be able to trade freely in any EU country without tariffs or restrictions. Likewise, EU goods and services will be able to sell more easily and cheaply to businesses and customers in Ukraine, Georgia and Moldova.

"It's absolutely a new perspective for my country," Poroshenko said.

It was the decision of his predecessor, Viktor Yanukovych, to back out of the EU association agreement in November that touched off massive protests in Ukraine, and that eventually led to Yanukovych's flight to Russia and Russia's occupation and annexation of Ukraine's Crimean Peninsula.

Putin calls for ceasefire

Meanwhile, Russian President Vladimir Putin called on Friday for a long-term ceasefire in Ukraine to allow talks between representatives of Kiev and eastern regions where rebels are waging an armed insurgency.

Poroshenko has warned a ceasefire now in place may not be extended beyond Friday night when it is due to expire if peace talks with pro-Russian separatists fail to yield a favourable outcome.

"Most important is the securing of a long-term ceasefire as a necessary condition for substantive talks between the authorities in Kiev and representatives of the southeastern regions," Putin said.

"We sincerely strive to help the peace process," he told delegates at a diplomatic ceremony in the Kremlin.

Western governments have piled pressure on Putin to take steps to disarm the rebels who Kiev accuses of numerous breaches of the truce aimed at giving the two sides time to find a political solution to the crisis.

Putin also said that the violence in Ukraine had forced tens of thousands of Ukrainians to seek refuge abroad, including in Russia.