Pro-Russian rebels parade OSCE hostages as US warns Moscow

Pro-Russian militants in Ukraine presented a captured team of international observers as “prisoners of war” Sunday, raising the stakes in the crisis as US President Barack Obama warned Moscow against “provocation”.

The self-styled mayor of rebel-held Slavyansk, which has become the epicentre of the crisis, led eight European members of an OSCE military inspection mission before scores of local and foreign journalists in the town hall.

With four armed rebels watching over him, a spokesman for the group, German officer Axel Schneider, said the team was in good health and stressed they were “OSCE officers with diplomatic status”.

“I cannot go home of my own free will,” he told reporters.

One of the OSCE men, a Swede, was later released as he suffers from diabetes, a rebel spokeswoman told AFP.

The Vienna headquarters of the Organisation for Security and Cooperation in Europe confirmed the release and said “the efforts in the OSCE towards the release of all the other detained military inspectors and accompanying persons are going to be continued”.

The local rebel leader, Vyacheslav Ponomaryov, earlier told reporters: “In our town, where a war situation is going on, any military personnel who don’t have our permission are considered prisoners of war.”

Pro-Russia militias this month occupied a string of towns and cities in eastern Ukraine, sparking a military response from the Ukrainian army, which is laying siege to Slavyansk.

The detention of the OSCE men sparked global outrage amid the worst East-West crisis since the end of the Cold War.

AFP reporters in Slavyansk said tensions were running high at checkpoints, as militants reinforced positions in the town and ordered journalists away.

The international community is on edge, with one Western diplomat pointing to a possible imminent invasion by Russia, which has some 40,000 troops massed on the border.

France’s Foreign Minister Laurent Fabius on Sunday warned of “incalculable consequences” if the situation in Ukraine deteriorates further.

– Hostage display ‘repugnant’ –

Speaking in Asia, Obama called for global unity as Europe and the United States prepare fresh sanctions against Moscow, which could come into force as early as Monday.

Obama said Russia had “not lifted a finger” to implement a deal struck in Geneva on April 17 to ease the crisis.

Continued Russian “provocation” would meet with “consequences, and those consequences will continue to grow”, he told reporters in Kuala Lumpur.

He urged Russia to “participate with international observers and monitors rather than stand by while they are being bullied and in some cases detained by these thugs”.

Germany’s foreign minister also weighed in, saying that “Russia has the duty to influence the separatists”, and deriding the public exhibition of the prisoners as “repugnant”.

“This is a violation of all negotiating rules and norms that prevail in tense situations like this one,” he added.

Russia has said it will take steps to secure the European inspectors’ freedom but has blamed Kiev for their capture, stressing it was up to the host country to ensure their security.

The rebels have accused the team — which also included five Ukrainians, one of whom was later released — of being “NATO spies” and said they would only be freed as part of a prisoner swap.

Ponomaryov claimed they were “not our hostages — they are our guests” and said he had “no direct contact with Moscow”.

The rebel mayor said there would be no contact with Kiev over the imprisoned Ukrainians because the pro-Kremlin insurgents see the capital’s Western-backed government as illegitimate.

Ponomaryov added the rebels were also holding three Ukrainian military officers captured overnight on what he said was a spying mission.

Russian television showed the Ukrainian men blindfolded, cuffed and in their underwear.

– ‘Move swiftly’ on sanctions –

As the crisis worsened, the Group of Seven leading economies and the European Union were readying sanctions that could be announced as soon as Monday in a bid to raise the pressure on Russian President Vladimir Putin.

The EU said top officials would meet Monday to weigh further sanctions. Diplomats have already approved in principle a list adding 15 people to the 55 Russians and Ukrainians already blacklisted.

The US and EU have already targeted Putin’s inner circle with visa and asset freezes and imposed sanctions on a key Russian bank.

Obama stressed the need for a unified response to isolate Russia.

It was vital to avoid “falling into the trap of interpreting this as the US is trying to pull Ukraine out of Russia’s orbit, circa 1950. Because that’s not what this is about,” he said.

“We’re going to be in a stronger position to deter Mr Putin when he sees that the world is unified and the United States and Europe are unified rather than this is just a US-Russian conflict,” Obama added.

A senior US official said the sanctions would target Russia’s defence industry as well as individuals and companies close to Putin.

However, former Russian tycoon Mikhail Khodorkovsky they would have “no short-term effect” on the Russian economy.

“It will only get serious in three or four years at least,” he said.

In Donetsk, a regional industrial hub, dozens of separatists brandishing baseball bats overran the local TV station, according to an AFP reporter on the scene.

The Ukraine crisis escalated after Russia refused to recognise Kiev’s new pro-EU government, which came to power in February after four months of street protests forced the ouster of Kremlin-backed president Viktor Yanukovych.

While Obama has ruled out sending US or NATO forces into Ukraine, Washington has begun deploying 600 US troops to bolster NATO’s defences in nearby eastern European states.

Ukrainian Prime Minister Arseniy Yatsenyuk has accused Russian warplanes of multiple incursions into Ukrainian airspace in an attempt to provoke “a third world war”.

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