Ukraine President Viktor Yanukovych intends to sign an association accord with the European Union after all, EU foreign affairs head Catherine Ashton has said.

Despite Yanukovych ditching the deal last month under Russian pressure, Ashton said on Thursday after returning to Brussels from a two-day visit to Kiev, where she saw huge pro-EU demonstrations, that it would go ahead.

"He made it clear to me that he intends to sign the association agreement," Ashton said.

The announcement came after Russian President Vladimir Putin touted the economic benefits of joining a customs union, known as the Eurasian Union, with Russia and two other former Soviet republics, Belarus and Kazakhstan, in his bid to woo Ukraine.

Putin said during during a state-of-the-nation address that he was counting on Ukraine finding a political solution to its crisis over Yanukovich's decision to spurn the EU free-trade agreement in favour of closer economic ties with Moscow.

"I hope that all political sides can successfully reach an agreement in the interests of the Ukrainian people," Putin said.

"I'm sure achieving Eurasian integration will only increase interest from our other neighbours, including from our Ukrainian partners."

Economic plan

Kiev has been gripped by weeks of demonstrations by hundreds of thousands of people against Yanukovich's decision which have often resulted in violent clashes with police.

The US said it might impose sanctions against Ukraine if security forces intensified a crackdown on anti-government demonstrators in the capital's Independence Square.

Ashton met the president and opposition leaders during her visit, in the hope of finding a way out of the deepening crisis over Ukraine's future.

"What he talked about were the short term economic issues that the country faces," Ashton said of her talks with Yanukovych.

"It's my view that theses challenges ... can be addressed by support, not only from the European institutions, but by showing that he has a serious plan.

"Signing the association agreement, will help to bring in investment."

Ashton condemned the use of force against peaceful demonstrations during her Kiev visit.

She urged the government to engage in dialogue and said that Yanukovych had agreed to do so, as he reiterated his wish to sign the Association Agreement.

The EU has made clear that the Association Agreement, which would mark a major commitment to the West and could lead to EU membership, is still on the table but that its terms can not be renegotiated.