First shelling in heart of Ukraine's rebel hub interrupts truce

The heart of Ukraine’s main pro-Russian separatist city came under heavy shelling Thursday for the first time since Moscow and Kiev struck a truce aimed at ending Europe’s worst crisis in decades.

Parts of the eastern coal mining hub of Donetsk, which was once home to nearly a million Russian speakers but now stands half-abandoned, were on fire after heavy rockets slammed into a 14-story central shopping centre shortly before 6:00 pm (1500 GMT).

The gleaming glass tower had been vacant for many weeks because of the fighting and city officials said they were still checking on any casualty figures. It was not immediately clear who staged the attack.

But it represented a dangerous new escalation in a conflict that — despite increased European mediation — has entered its sixth month with the death toll climbing above 3,200 and East-West relations at a post-Cold War low.

Smoke billowed Thursday over the northern half of Donetsk as resurgent rebels — backed by what NATO claims are hundreds of elite Russian forces — also tried to stage a final push on the devastated Donetsk airport that had been their target since May.

“There is a huge fire burning at the airport. It is probably due to the fuel,” a representative at the Donetsk separatist headquarters said as periodic rounds of machine gun fire echoed through deserted streets.

The rebel representative said gunmen had briefly entered a section of the main terminal of what was once the east’s busiest air hub before they were repelled.

Nearly 70 Ukrainian troops and civilians — along with an undisclosed number of separatist gunmen who control swathes of eastern Ukraine — have been killed since Moscow and Kiev signed the 12-point peace pact on September 5.

But the fighting has barely slowed. The rebels continue to reject Ukrainian President Petro Poroshenko’s efforts to save the ex-Soviet country from disintegration by offering autonomy to its ethnically Russian parts.

The upsurge in violence prompted German Chancellor Angela Merkel — viewed as Kiev’s closest and most powerful European ally — to call Russian President Vladimir Putin and remind him of Moscow’s “responsiblity” to rein in the rebels.

– Russian gas war –

Ukraine’s security concerns have been exacerbated by a new gas war with Russia that threatens to leave parts of the near-bankrupt country without heating through the long winter months.

Russia nearly doubled Ukraine’s gas price a few weeks after the February ouster in Kiev of a Kremlin-backed president who had earlier rejected a historic EU trade and political association deal.

Kiev refused to make the extra payment and Russia’s decision in June to cut Ukrainian shipments has fuelled an economic meltdown that has forced world powers to cobble together $27 billion (21 billion euros) in emergency aid.

The World Bank downgraded Ukraine’s 2014 economic growth forecast to an eight-percent contraction — three percentage points lower than its previous outlook and more in line with the view taken by other institutions.

“There is no easy way out of the current crisis,” regional World Bank director Qimiao Fan warned.

The Ukrainian energy chiefs travelled to Brussels ahead of what both Kiev and Moscow said would be a new round of EU-brokered talks in Berlin on Friday about the energy dispute.

But Thursday’s talks between teams led by Ukrainian Energy Minister Yuriy Prodan and EU Energy Commissioner Guenther Oettinger were cancelled and the Kiev delegation decided to extend its stay by a day.

Russia’s energy ministry spokeswoman Olga Golant said new three-way discussion that Oettinger said would be held by the end of the week in Berlin had also been postponed.

“EU officials said they would not be able to take part (on Friday),” said the Russian ministry spokeswoman.

“We will announce a date when it is set.”

European officials did not immediately explain the apparent last-minute delays, but they came a day after EU member Slovakia reported a 50-percent drop in its Russian gas supplies.

The former Soviet satellite nation had refused to bow to earlier Moscow pressure and continued diverting some of its Russian gas imports to Ukraine in order to ease its growing gas shortage.

Moscow accused Slovakia of violating the terms of its contract with Russia’s state-held gas giant Gazprom and threatened to limit supplies to countries that assist Ukraine.

But Gazprom said Thursday that its delivery volumes to Slovakia remained steady. It also suggested that Bratislava was probably referring to the Russian firm’s failure to meet its request for additional volumes.

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