Russian president Vladimir Putin has hit back at accusations that he has effectively invaded Ukraine, accusing Ukrainian forces of behaving like Nazis in the conflict in the east, and ominously threatening to take his standoff with the west into the disputed Arctic.
Hours after Barack Obama accused Russia of sending troops into Ukraine and fuelling an upsurge in the separatist war, Putin retorted that the Ukrainian army was the villain of the piece, targeting residential areas of towns and cities like German troops did in the former Soviet Union.
He added that Russians and Ukrainians "are practically one people", reprising a theme of an earlier statement in which he referred to the disputed areas of southeastern Ukraine as Novorossiya – a throwback to tsarist times when the area was under Moscow rule.
And he made a pointed reference to the Arctic, which with its bounteous energy reserves and thawing waterways is emerging as a new potential conflict between Russia and its western rivals. "Our interests are concentrated in the Arctic. And of course we should pay more attention to issues of development of the Arctic and the strengthening of our position," Putin told a youth camp outside Moscow.
Russia's latest alleged interventions in Ukraine, in which it stands accused of sending as many as 1,000 soldiers and military hardware across the border to bolster the flagging separatist insurrection, has prompted a flurry of emergency meetings.
Nato ambassadors emerged from a meeting on Friday morning to accuse Russia of a "blatant violation" of Ukraine's sovereignty. "Despite Moscow's hollow denials, it is now clear that Russian troops and equipment have illegally crossed the border into eastern and south-eastern Ukraine," its secretary general Anders Fogh Rasmussen said.
Barack Obama convened his national security council on Thursday, and emerged to say that Moscow was responsible for the recent upsurge in violence, in which a new front has opened up in Ukraine's far southeast close to the city of Mariupol.
Speaking at a news conference in Washington, the US president said Russia was encouraging, training, arming and funding separatists in the region and warned Moscow that it faced further isolation.
He said: "Russia has deliberately and repeatedly violated the sovereignty and territorial integrity of Ukraine and the new images of Russian forces inside Ukraine make that plain for the world to see. This comes as Ukrainian forces are making progress against the separatists."
Obama again ruled out US military action, but threatened a further tightening of sanctions.
"As a result of the actions Russia has already taken, and the major sanctions we've imposed with our European and international partners, Russia is already more isolated that at any time since the end of the cold war," he said. "Capital is fleeing. Investors are increasingly staying out. Its economy is in decline." Financial markets echoed his words, and the ruble fell to an all-time low against the dollar on Friday morning.
Putin hit back by saying it was the Ukrainians who had failed to make peace happen. "It is necessary to force the Ukrainian authorities to substantively begin these talks – not on technical issues ... the talks must be substantive," Putin said. "Small villages and large cities [are] surrounded by the Ukrainian army, which is directly hitting residential areas with the aim of destroying the infrastructure ... It sadly reminds me the events of the second world war, when German fascist ... occupants surrounded our cities."
For its part, Ukraine raised the stakes further this morning when the prime minister Arseny Yatseniuk said he would try to take the country into Nato. Ukraine has formally maintained a position of non-alignment since its independence in 1991; the current crisis started over deep divisions in the country over whether to align itself more closely with the EU or turn towards the Russian camp.
The UN security council met on Thursday night, and the British ambassador Mark Lyall Grant repeated Nato assertions that Russia had deployed more than 1,000 troops in Ukraine.
"Formed units of the armed forces of the Russian federation are now directly engaged in fighting inside Ukraine against the armed forces of Ukraine. These units consist of well over 1,000 regular Russian troops equipped with armoured vehicles, artillery and air defence systems," he said.
State department spokeswoman Jen Psaki amplified Obama's comments with details of Russia's involvement in Ukraine.
"Russia has ... stepped up its presence in eastern Ukraine and intervened directly with combat forces, armoured vehicles, artillery, and surface-to-air systems, and is actively fighting Ukrainian forces as well as playing a direct supporting role to the separatists' proxies and mercenaries," she told a media briefing.
Samantha Power, US ambassador to the UN, accused Russia of lying about its involvement in Ukraine. "It has manipulated. It has obfuscated. It has outright lied," she said.
"The mask is coming off. In these acts, these recent acts, we see Russia's actions for what they are: a deliberate effort to support, and now fight alongside, illegal separatists in another sovereign country."
Russia's UN ambassador, Vitaly Churkin, responded: "There are Russian volunteers in eastern parts of Ukraine. No one is hiding that." Russia has denied that its troops are in Ukraine helping separatists fight the Ukrainian army.
But back at home, relatives of soldiers have started to break ranks, publicising the fact that their kin are in Ukraine.
One grandfather, Mikhail Smirnov, has told the Guardian that his 22-year-old grandson, Stanislav Smirnov, sent a message from the Ukrainian border on 19 August saying his motor rifle brigade is "being deployed". They have heard nothing since.
"Our government has gone too far –- it has lost its head," the grandfather said. When reminded that Moscow claims it has no troops in Ukraine, he added: "Hey, we are not blind."
Original headline: Putin likens Ukraine's forces to Nazis and threatens standoff in the Arctic
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