Ukraine Prime Minister Arseniy Yatsenyuk (file photo)
Ukraine's embattled premier vowed on Friday to grant more power to the country's regions in a bid to stamp out a separatist insurgency that sprang up just as a new Russian gas war threatened European supplies.
Prime Minister Arseniy Yatsenyuk's promise during a visit to the coal mining region of Donetsk came as militants armed with Kalashnikovs barricaded themselves inside the local government building and demanded a referendum on joining Russia.
A similar occupation of the state security office of the hardscrabble eastern city of Lugansk has confronted Ukraine's untested leaders with their biggest challenge since their February ouster of a Kremlin-backed president and decision to strike an alliance with the West.
But Russian President Vladimir Putin - his troops already massed along Ukraine's eastern border following their seizure of Crimea - only upped the stakes by threatening to cut off Ukraine's gas over unpaid bills.
"The issue is not about us. The issue is about securing transits through Ukraine," Putin said on Friday.
The decision could limit the supplies of at least 18 European nations for the third time since 2006. Each of the previous interruptions also coincided with attempts by Ukraine to pull itself out of the Kremlin's historic sphere of influence.
Putin's warning came after Russia had already nearly doubled Ukraine's energy price and demanded that its neighbour rewrite its constitution in order to give eastern regions the right to set their own economic and diplomatic relations with Moscow.
The Kremlin's emphatic response to its possible loss of control over the nation of 46 million people has plunged its relations with the West to post-Cold War lows and forced NATO to step up the defence of former Soviet satellite states.
"We are not discussing military options," NATO chief Anders Fogh Rasmussen said in Sofia.
"But NATO is focused on ensuring defence and protection of all our allies and we will take all steps necessary to make sure that this collective defence is effective."
The sabre rattling has set an ominous tone to the first round of international negotiations on the crisis, which US and EU diplomats have managed to convince both Moscow and Kiev to join in Geneva on April 17.
'More regional authority'
But Yatsenyuk was more preoccupied with trying to end a five-day siege by pro-Kremlin militants who have seized strategic buildings and exposed Kiev's limited sway over the heavily industrialised east.
He flew overnight to Donetsk to enlist the help of its mayor and Rinat Akhmetov - Ukraine's richest man and one of its most legendary powerbrokers - in finding a bloodless solution to the militants' occupation of the local government seat.
Yatsenyuk immediately addressed one of the protesters' most pressing concerns by promising never to limit the use of Russian in the region.
"No one under any circumstances will restrict the use of a language that a person is accustomed to using," Yatsenyuk told local officials.
He also admitted that he "must respond to people's desire to have more regional authority".
"We will implement this task within the framework of constitutional reforms," said Yatsenyuk.
Kiev has previously said it was ready to grant more powers to the regions while stopping well short of creating the federation sought by Russia.
Yatsenyuk said the devolution of power would be detailed in a new draft constitution to be made public by the time Ukraine holds snap presidential polls on May 25.
Akhmetov for his part warned the premier against using force to dislodge the militants - a possibility raised by the Ukrainian interior minister earlier in the week.
"I am against bloodshed," the tycoon told Yatsenyuk. "The only right path is through negotiations."
Yatsenyuk agreed that force was not an option but did not immediately indicate how he intended to resolve the standoff.
'Significant sanctions'
The tinderbox atmosphere in Ukraine's biggest cities has been matched by increasingly passionate rhetoric in diplomatic capitals around the globe.
The Ukrainian crisis was near the top of the agenda of World Bank-IMF meetings in Washington that saw US Treasury Secretary Jacob Lew confront his Russian counterpart Anton Siluanov.
Lew told the finance minister that "the United States is prepared to impose additional significant sanctions on Russia if it continues to escalate the situation in Ukraine."
The US has already imposed travel and financial sanctions against members of Putin's inner circle while the European Union has imposed similar restrictions on dozens of Russian lawmakers.
Russian Foreign Minister Sergei Lavrov said Washington appeared to misunderstand Moscow's primary interest in Ukraine.
"We want Ukraine to remain whole, keeping its current borders," Russia's top diplomat said.
"But it must remain whole while completely respecting its regions," he stressed.