Ukraine crisis: Russian president Vladimir Putin hopes ceasefire will be finalised by September 5

Updated

Russian president Vladimir Putin says he hopes a peace agreement between Ukraine and pro-Russian rebels will be reached by Friday, as Barack Obama vows to defend the former Soviet country from the aggression of its more powerful neighbour.

A spokesman for Mr Putin had earlier denied claims, from Ukrainian counterpart Petro Poroshenko's office, that a ceasefire had been reached in eastern Ukraine's Donbass region because "Russia is not a party to Ukraine conflict".

But Mr Putin later said he had spoken with Mr Poroshenko and that a truce in the conflict could be reached by September 5.

"Our views on the way to resolve the conflict, as it seemed to me, are very close," Mr Putin told reporters in Mongolia.

Pro-Russian separatists are battling Kiev's forces in the mainly Russian-speaking Donbass region, where the city of Donetsk has declared independence from Ukraine.

Speaking overnight in Estonia, Mr Obama said NATO will not accept Russia's "illegal annexation" of Crimea or any part of Ukraine.

"We will stand firm and united to meet the test of this moment," Mr Obama said.

"First we will defend our NATO allies and that means every ally. We will defend the territorial integrity of every single ally. An attack on one is an attack on all."

Meanwhile, the Police defence ministry announced Ukraine would host US-led military drills later this month involving hundreds of allied troops.

The US military-led exercises, dubbed "Rapid Trident 14", are to be held between September 13 and 26 in western regions close to NATO-member Poland.

A rebel leader said the withdrawal of Ukrainian forces from the region would be the main condition for peace.

Vladimir Antyufeyev, deputy prime minister of the self-proclaimed Donetsk People's Republic, told Reuters that talk of a ceasefire between Russia and Ukraine was a "provocation".

"A ceasefire is always good but our main condition still stands: to withdraw Ukrainian troops from our territory," he said.

"That's the only reasonable way."

However, Ukraine's prime minister Arseny Yatseniuk showed no signs of backing down, branding Russia a "terrorist state" that is solely to blame for the conflict. He reaffirmed Kiev's desire to join the NATO alliance.

"Russia is a terrorist state, it is an aggressor state and will bear responsibility under international law," he said.

Mr Yatseniuk also told a televised cabinet session he had adopted a "wall" project aimed at building a "real state border" between Ukraine and Russia. He did not elaborate.

Since the collapse of the Soviet Union, the long border between the two countries has been largely porous - a fact that Kiev says has helped fighters and weapons to pass freely from Russia onto its territory.

Moscow earlier warned it would change its military strategy in response to the Ukraine crisis and NATO's presence in eastern Europe.

Mikhail Popov, a senior Kremlin adviser, told a Russian news agency one of the key external threats to Russia was the increasing proximity of NATO's military infrastructure to its borders. He said Russia's military strategy would be altered accordingly.

NATO leaders will gather in Wales on Thursday for a summit that is expected to approve the formation of a new rapid reaction military force to respond to threats to the military alliance.

EU-Russia 'strategic partnership is over'

The next European Union foreign policy chief, Frederica Mogherini, said Moscow had ended its strategic partnership with the EU.

When asked about the EU-Russia partnership, Ms Mogherini said: "Our strategic partnership is over, really over. That was a choice of Moscow first of all."

She said the EU would decide by Friday on fresh sanctions against Moscow.

On Tuesday EU officials proposed sanctions to starve Russian firms of cash as punishment for Moscow's role in Ukraine, where pro-Russian separatists said they were storming Donetsk airport.

Russia denies its troops are involved in fighting on the ground, in the face of what Western countries and Ukraine say is overwhelming evidence.

Russian foreign minister Sergei Lavrov has called on Washington to use its influence in Kiev to push for peace in eastern Ukraine.

Australia to open 'interim' embassy in Kiev

Meanwhile, Prime Minister Tony Abbott has announced Australia will open an embassy in the Ukrainian capital.

Mr Abbott said the interim embassy was a show of friendship towards Ukraine and would support Australian Federal Police officers investigating the Malaysia Airlines MH17 disaster.

He said the Government was also considering short-term humanitarian and non-lethal military assistance to Ukraine.

"We are considering civil and military capacity building assistance to that country," Mr Abbott said.

"Australia's reach is not unlimited, but we will do what we can to help our friends and uphold the rule of law around the world."

The conflict in Ukraine has killed more than 2,600 people and driven nearly a million from their homes in eastern Ukraine, according to the United Nations.

Sharp rise in Ukrainian displacement, UN says

The UN said the number of people displaced by the Ukrainian crisis had doubled over the past month.

As of Monday, 260,000 people were internally displaced in Ukraine, compared to 117,000 on August 5, according to estimates by the UN High Commissioner for Refugees.

"The UNHCR believes the actual number of people displaced is much higher as many are staying with families and friends and choosing not to register with the authorities," UNHCR spokesman Adrian Edwards.

The agency has quoted Russian authorities as saying that about 814,000 Ukrainians have entered Russia since the start of the year, including people seeking refugee status and temporary asylum.

About 4,100 Ukrainians requested asylum in the European Union between January and July, up from 903 for the whole of 2013, the UNHCR said.

ABC/wires

Topics: unrest-conflict-and-war, world-politics, defence-and-national-security, ukraine, russian-federation, united-states, european-union, australia

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