Obama, Putin Talk as Separatists Tighten Grip on East Ukraine

Pro-Russia demonstrators on Monday defied a government deadline to vacate occupied buildings in exchange for amnesty, as Ukraine's interim president threatened a military crackdown.

Dozens of protesters smashed windows of the police headquarters in the eastern Ukrainian city of Horlivka and scuffled with police as they took control of the facility.

Obama, Putin to continue diplomacy

Russian President Vladimir Putin urged U.S. President Barack Obama to discourage the Ukrainian government from using force against protesters.

During a phone conversation Monday with Obama, the Russian leader denied claims of Russian agents' involvement in the protests as "speculations based on unreliable information.'' Putin said the protests vented public anger about the Ukrainian government's reluctance to recognize the interests of Russian speakers in the east.

The Kremlin said it had requested the call. The White House said the call was frank and direct.

The White House said Obama urged Russia to use its influence to get separatists in the country to stand down.

"The president emphasized that all irregular forces in the country need to lay down their arms, and he urged President Putin to use his influence with these armed, pro-Russian groups to convince them to depart the buildings they have seized," the White House said in a statement.

The two sides agreed to continue efforts to seek diplomatic cooperation in the context of the Ukrainian situation ahead of a four-party meeting (EU, Russia, U.S. and Ukraine) scheduled to take place in Geneva on April 17.

Demanding a referendum

The demonstrators are demanding a referendum on whether to split with Ukraine and join Russia - similar to last month's vote in Crimea.

Donetsk, a province with 4.3 million people - 10 percent of Ukraine's population - and much of its heavy industry, is the biggest prize of the eastern regions where pro-Russian separatists have captured government buildings in the past week.

Ukrainian leader Oleksandr Turchynov said he is not against a national referendum on what kind of country Ukraine should be. He said he is certain a majority would support a united and independent Ukraine, possibly giving broader localized rights to the east. He said such a vote could be held at the same time as the May 25 presidential election.

In Moscow, Russian Foreign Minister Sergei Lavrov said Monday he believes Russian-speaking Ukrainians in the eastern part of the country should be part of drafting a new constitution.

CIA visit

A White House spokesman said U.S. Central Intelligence Agency director John Brennan was in the Ukrainian capital during the weekend, confirming reports in Russian media, but denying claims that the CIA encouraged Ukraine to use force on the separatists.

U.S. Ambassador to Ukraine Geoffrey Pyatt told VOA's Russian service that his greatest fear for the region is that the conflict devolves into greater violence, which the United States does not want.

"You have people in cities across eastern Ukraine, some of them heavily armed with Russian weapons including state-of-the art sniper rifles, Russian inventory automatic machine guns with grenade launchers. These are not peaceful protesters, this is an armed force. And I think there is a real risk that their actions could precipitate greater violence and any bloodshed of course is something that the United States will oppose," said Pyatt.

$1 billion for Ukraine

U.S. officials signed a $1 billion loan guarantee to Ukraine. U.S. Treasury Secretary Jacob Lew said the agreement demonstrates the United States' unwavering commitment to a stable Ukraine. Ukrainian Finance Minister Oleksandr Shlapak said his country is wrapping up talks with the IMF on a comprehensive economic reform program.

The Pentagon also confirmed a Russian SU-24 fighter aircraft flew at least 12 close-range passes Saturday near a U.S. ship in the Black Sea. A Pentagon spokesman said the USS Donald Cook was never in danger, but called the passes "provocative and unprofessional." U.S. defense officials said the action is part of a pattern of Russia's unwillingness to deescalate with Ukraine.

Meanwhile, the White House has denied reports it is considering to provide arms for Ukrainian forces.

“We are looking at a variety of ways to demonstrate our strong support for Ukraine, including diplomatically and economically,'' White House spokesman Jay Carney told reporters.

He added that “we are not actively considering lethal aid but we are reviewing the kinds of assistance we can provide.”

Chatter intercepted

The Security Service of Ukraine (SBU) says it has intercepted what it claims is chatter between separatists in eastern Ukraine and their Russian commanders.

The SBU published a recording of several alleged intercepts with transcriptions on its YouTube channel.

"[The intercepts] confirm that the Russian Federation is conducting a large-scale military aggression in eastern Ukraine...," says a statement the SBU published on its website.

The statement adds that the operation is being implemented by elite units of the Russian Armed Forces.

The SBU says that the objective of these units is to "terrorize local citizens, to sabotage planned talks between Ukraine, the U.S, the EU and Russia, and to destroy Ukrainian law enforcement [structures].”

EU agrees on more sanctions

European Union foreign ministers agreed on Monday to expand sanctions against Russia over its actions in Ukraine by putting more people under asset freezes and visa bans, British Foreign Secretary William Hague said.

“We have agreed among foreign ministers to expand the sanctions... and to add further names to those sanctions,” Hague told reporters after a meeting in Luxembourg.

The EU has only taken a decision in principle to expand the list. There would now be “some rapid and important work on the exact numbers and names” of those to be added to the list, Hague said.

The EU ministers also formally approved an assistance package for cash-strapped Ukraine and a plan to provide temporary tariff preferences for Ukrainian goods.

Economic ripples

Russian stocks and the ruble fell sharply on Monday, reflecting fears of further Russian military intervention in Ukraine and more western sanctions against Moscow.

Kyiv is also facing economic disarray. The central bank nearly doubled its overnight interest rate to 14.5 percent from 7.5 percent. Ukraine's hryvnia currency has lost 38 percent of its value against the dollar this year.

Moscow has largely brushed off sanctions so far, which the U.S. and Europe have explicitly designed to target only a limited number of officials and avert wider economic harm.

OSCE pushes dialogue

Didier Burkhalter, chairman of the Organization for Security and Cooperation in Europe, said on Monday the Ukrainian government would organize discussions on decentralization across the regions.

“We have discussed that this morning with the government [which] is ready to work closely for organizing roundtables in the regions immediately,” Burkhalter said during a news conference in Kyiv.

OSCE monitors have been assessing the situation in eastern Ukrainian cities of Kharkiv, Luhansk, Donetsk and Slovyansk. Burkhalter said the situation on the ground was tense.

“I'd like to call upon all sides to move the situation away from confrontation,” said Burkhalter adding that challenges must be tackled through inclusive and structured dialogue.

Some reporting by Reuters.