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A woman sweeps away the broken glass as two unidentified armed men guard the entrance to the local government building in downtown Simferopol, Ukraine, on Sunday, March 2, 2014. A convoy of hundreds of Russian troops headed toward Simferopol the regional capital of Ukraine's Crimea region on Sunday, a day after Russia's forces took over the strategic Black Sea peninsula without firing a shot. (AP Photo/Ivan Sekretarev)
Putin cools tensions in Ukraine; Kerry in Kiev
First Published Mar 04 2014 09:17 am • Last Updated Mar 04 2014 04:35 pm

Moscow • Stepping back from the brink of war, Vladimir Putin talked tough but cooled tensions in the Ukraine crisis in his first comments since its president fled, saying Tuesday that Russia has no intention "to fight the Ukrainian people" but reserved the right to use force.

As the Russian president held court in his personal residence, U.S. Secretary of State John Kerry met with Kiev’s fledgling government and Moscow agreed to sit down with NATO.

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Although nerves remained on edge in Crimea, with Russian troops firing warning shots to ward off Ukrainian soldiers, global markets catapulted higher on tentative signals that the Kremlin was not seeking to escalate the conflict. Kerry brought moral support and a $1 billion aid package to a Ukraine fighting to fend off bankruptcy.

Lounging in an arm-chair before Russian tricolor flags, Putin delivered a characteristic performance filled with earthy language, macho swagger and sarcastic jibes, accusing the West of promoting an "unconstitutional coup" in Ukraine. At one point he compared the U.S. role to an experiment with "lab rats."

But the overall message appeared to be one of de-escalation. "It seems to me (Ukraine) is gradually stabilizing," Putin said. "We have no enemies in Ukraine. Ukraine is a friendly state."

He tempered those comments by warning that Russia was willing to use "all means at our disposal" to protect ethnic Russians in the country.

Significantly, Russia agreed to a NATO request to hold a special meeting to discuss Ukraine on Wednesday in Brussels, opening up a possible diplomatic channel in a conflict that still holds monumental hazards and uncertainties.

While the threat of military confrontation retreated somewhat Tuesday, both sides ramped up economic feuding in their struggle over Ukraine. Russia hit its nearly broke neighbor with a termination of discounts on natural gas, while the U.S. announced a $1 billion aid package in energy subsidies to Ukraine.

"We are going to do our best (to help you). We are going to try very hard," Kerry said upon arriving in Kiev. "We hope Russia will respect the election that you are going to have."

Ukraine’s finance minister, who has said Ukraine needs $35 billion to get through this year and next, was meeting Tuesday with officials from the International Monetary Fund.


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World stock markets, which slumped the previous day, clawed back a large chunk of their losses Tuesday on signs that Russia was backpedaling. Gold, the Japanese yen and U.S. treasuries — all seen as safe havens — returned some of their gains. Russia’s RTS index, which fell 12 percent on Monday rose 6.2 percent Tuesday. In the U.S., the Dow Jones industrial average was up 1.2 percent.

"Confidence in equity markets has been restored as the standoff between Ukraine and Russia is no longer on red alert," said David Madden, market analyst at IG.

Russia took over the strategic peninsula of Crimea on Saturday, placing its troops around its ferry, military bases and border posts. Two Ukrainian warships remained anchored in the Crimean port of Sevastopol, blocked from leaving by Russian ships.

"Those unknown people without insignia who have seized administrative buildings and airports ... what we are seeing is a kind of velvet invasion," said Russian military analyst Alexander Golts.

The territory’s enduring volatility was put in stark relief Tuesday morning: Russian troops, who had taken control of the Belbek air base, fired warning shots into the air as some 300 Ukrainian soldiers, who previously manned the airfield, demanded their jobs back.

As the Ukrainians marched unarmed toward the base, about a dozen Russian soldiers told them not to approach, then fired several shots into the air and said they would shoot the Ukrainians if they continued toward them.

The Ukrainian troops vowed to hold whatever ground they had left on the Belbek base.

"We are worried. But we will not give up our base," said Capt. Nikolai Syomko, an air force radio electrician holding an AK47. He said the soldiers felt they were being held hostage, caught between Russia and Ukraine. There were no other reports of significant armed confrontations Tuesday in Ukraine.

Amid the tensions, the Russian military on Tuesday successfully test-fired a Topol intercontinental ballistic missile. The missile, fired from a launch pad in southern Russia, hit a designated target on a range leased by Russia from Kazakhstan.

The new Ukrainian leadership in Kiev, which Putin does not recognize, has accused Moscow of a military invasion in Crimea, which the Russian leader denied.

Ukraine’s prime minister expressed hope Tuesday that a negotiated solution could be found. Arseniy Yatsenyuk told a news conference that both governments were talking again, albeit slowly.

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