Russia:Russia agreed last night not to cut gas supplies to Ukraine over unpaid fuel bills, but then warned its neighbour that it could become a target for Moscow's missiles if it pushes ahead with plans to join Nato.
"We have heard from our partners that the settlement of the debt will begin shortly," Russian president Vladimir Putin said after tense talks with Ukrainian counterpart Viktor Yushchenko, whose visit was overshadowed by a threat from Kremlin-controlled Gazprom to reduce gas supply to his country over alleged arrears of $1.5 billion (€975 million).
"Gazprom is satisfied with the offers made by the Ukrainian side," Mr Putin said. "We have agreed on the principles of co-operation." No details of their agreement were immediately released.
Ukraine's prime minister, Yulia Tymoshenko, said a debt of only about $1 billion was outstanding and that it should be paid back in instalments.
She also demanded a new energy deal with Russia that did not involve any intermediary firms. She blames the row on shadowy trading company RosUkrEnergo, which makes huge profits handling Gazprom's gas sales to Ukraine.
Gazprom had threatened to cut gas supplies to Ukraine by about a quarter if no agreement was reached yesterday.
The reprieve is expected to boost Mr Yushchenko's standing in his power struggle with ally Ms Tymoshenko, whom he sacked as premier in 2005 just months after they triumphed in the so-called Orange Revolution.
Many analysts saw the gas row as Russia's way of extracting political concessions from Mr Yushchenko, particularly a pledge not to join Nato and to extend the Russian navy's lease on a base on Ukraine's Black Sea coast.
After lifting the threat of gas shortages, Mr Putin told his guest that Russia might aim missiles at Ukraine if it joined Nato and hosted part of a planned US missile defence system.
"I am not only terrified to utter this, it is scary even to think that Russia, in response to a possible deployment of . . . the missile shield in Ukraine . . . would have to target its offensive rocket systems at Ukraine," Mr Putin said.
He is expected to attend a Nato summit in Romania in April, at which incorporating the planned US radar in the Czech Republic and proposed US missile base in Poland will be discussed.
