File Photo: A Ukrainian serviceman climbs out of an army tank at a checkpoint near Horlivka, in the region of Donetsk. (Agence France-Presse)

The top US diplomat for Europe declared on Tuesday that Crimea and parts of eastern Ukraine were subject to a "reign of terror", blaming Russia for a conflict that has claimed thousands of lives.



"Even as Ukraine is building a peaceful, democratic, independent nation across 93 per cent of its territory, Crimea and parts of eastern Ukraine are suffering a reign of terror," Assistant Secretary of State Victoria Nuland told the Senate Foreign Relations Committee.



"Today Crimea remains under illegal occupation and human rights abuses are the norm, not the exception, for many at risk groups there," she said of the Black Sea peninsula annexed by Russia a year ago.



Nuland cited Crimea's minority Crimean Tatars and Ukrainians who refuse to give up their passports for Russian documents as well as gays among those at risk of persecution.



Meanwhile, in eastern Ukraine, where a ceasefire between government forces and pro-Russian separatists is largely holding, "Russia and its separatist puppets" had unleashed "unspeakable violence", Nuland said.



'Manufactured conflict'



Nuland called the insurgency a "manufactured conflict" directed by the Kremlin, which had sent "hundreds of young Russians... to fight and die there."



Her broadside came as British Foreign Secretary Philip Hammond said Moscow's "aggressive behaviour" showed it had "the potential to pose the single greatest threat" to British security.



In a speech at British defence think-tank RUSI, Hammond accused Russian President Vladimir Putin of "subverting" international rules which keep the peace between nations and said Putin's actions in Crimea and eastern Ukraine also undermined the security of other former Soviet states.



NATO forces are preparing for a major exercise in the Baltic states of Estonia, Latvia and Lithuania, on Russia's western doorstep.



US military officials said the deployment of some 3,000 troops had begun for the three-month Operation Atlantic Resolve, following the Russian annexation of Crimea.



The move came as Russia said on Tuesday it was quitting a European arms control agreement seen as a cornerstone of security in post-Cold War Europe.



Moscow had already suspended its participation in the Treaty on Conventional Forces in Europe in 2007 and has now also suspended its participation in a consulting group on the pact, the latest sign of deep tensions with the West.



Ukraine and the West accuse Russia of providing the separatists who took up arms against Kiev last year with troops, training and weaponry. The EU and US have hit Moscow with several rounds of sanctions.





Moscow denies any military involvement in the conflict but despite the lull in fighting since an EU-mediated truce was struck in mid-February, remains under strong diplomatic pressure from European capitals and Washington.The conflict has taken a heavy toll on Ukraine's economy, with Kiev hoping for IMF approval Wednesday of a $17.5 billion aid package needed to pull the country from the brink of bankruptcy.Swedish Prime Minister Stefan Loefven was also due to meet with President Petro Poroshenko in Kiev Wednesday after the Ukrainian leader reported progress in the implementation of the ceasefire deal.Government forces had "withdrawn the lion's share of multiple launch rocket systems and heavy artillery" and the rebels "have also withdrawn a significant part", Poroshenko told state television Monday night.But Ukraine continued to sustain losses in sporadic clashes, with 64 soldiers killed since the ceasefire signed in the Belarus capital Minsk came into effect on February 15.Both sides have repeatedly accused each other of flouting the truce. Kiev Tuesday accused the separatists of using mortars and grenades to attack government positions near the rebel-held city of Donetsk.On Monday, nine Ukrainian soldiers were wounded in a day of fighting near the southeastern port of Mariupol, security spokesman Andriy Lysenko said.Western leaders have warned that any attempt by the rebels to seize the steel-making city of 500,000 would trigger further sanctions against Russia.An AFP reporter on Tuesday saw trucks transporting rebels about 20 kilometres east of Mariupol and separatists digging trenches about 60 kilometres northeast of the city. Next to them were three parked tanks.

The rebels insist they are upholding their end of the Minsk accord and accuse Kiev of failing to do the same."Kiev has not conducted a proper withdrawal of heavy arms," Andrey Purgin, an official from the Donetsk People's Republic told Russian Interfax news agency.