BERLIN(Reuters) - Any United Nations peacekeepers sent to eastern Ukraine must be granted access to the entirety of the region held by Moscow-backed separatists, German Chancellor Angela Merkel said.

Russian President Vladimir Putin floated the idea of deploying U.N. troops to eastern Ukraine in a Monday call with Merkel, suggesting that the U.N. mission could protect observers from the international OSCE monitoring mission.

With growing calls in Germany for the lifting of European Union sanctions against Russia over its activities in Ukraine, Moscow has been keen to float proposals that would help soften export bans that have hit Russians' living standards.

"I find President Putin's proposal to send U.N. troops to protect OSCE observers interesting," she told the FUNKE newspaper group on Friday. "A few days ago I discussed with him that the U.N. troops must have access to everywhere where the OSCE is stationed, so the entire Donetsk/Luhansk region."

The conflict between Ukrainian forces and Russian-backed separatists has claimed more than 10,000 lives since it erupted in 2014. Russia denies Western accusations it fomented the conflict and provided arms and fighters.

The observers are there to monitor implementation of a peace deal agreed in Minsk in 2015, which has been largely unsuccessful in settling the conflict despite German and French urgings.

Some German politicians have said sanctions should be lifted if the peace deal is implemented. Christian Lindner, leader of the Free Democrats, a likely coalition partner for Merkel after Sept. 24 elections, even suggested Germany must accept Russia's occupation of Ukraine's Crimean peninsula.

Merkel said Putin's proposals were "tender shoots" of progress, "which give no cause for softening sanctions" so far. She rejected Lindner's proposal.

"The annexation is against international law and must not be accepted," she said.

(Reporting By Thomas Escritt; editing by Ralph Boulton)