Ukraine in 'Pivotal Period' as Deal Stalls, U.S. Warns Russia

Russia was under intense U.S. pressure Saturday to convince pro-Moscow rebels in Ukraine to give up eastern towns they are occupying, after Washington said the situation in the former Soviet republic was in a "pivotal period".

But with the separatists' refusal to budge throwing a deal to defuse the crisis into doubt, and U.S. sanctions looming large, Russia was biting back -- warning that its military is massed on Ukraine's border, ready to act.

In the nearly dozen Ukrainian towns the pro-Kremlin rebels were holding, the stalemate dragged on Saturday.

In the major eastern city of Donetsk, separatist gunmen remained barricaded inside the regional government building. Around 50 of the militants milled around barricades of sandbags and tires while morning joggers ran by almost oblivious to them.

"We are going on as usual," one of the rebels told AFP. "An Orthodox priest is inside with us and we are going to celebrate Easter tonight."

The failure to implement the agreement hammered out in Geneva on Thursday by the U.S., Russia, Ukraine and the EU threatened to deepen the worst East-West crisis since the Cold War.

U.S. Secretary of State John Kerry told Russian Foreign Minister Sergei Lavrov overnight that "full and immediate compliance" was needed of the pact, which calls for the disarmament of "illegal armed groups" and the end to the occupation of seized buildings.

Kerry "made clear that the next few days would be a pivotal period for all sides to implement the statement's provisions," a senior State Department official said.

U.S. President Barack Obama has said he wants to see progress within days, otherwise more sanctions would be imposed, on top of those already targeting the inner circle of Russian President Vladimir Putin.

The United States, NATO and many EU countries see Putin as the puppet master behind the Ukraine insurgency. They accuse him of sending in elite Russian soldiers to stir unrest and ensure the country -- historically and linguistically tied to Russia -- stays in Moscow's orbit.

U.S. National Security Adviser Susan Rice said on Friday that the White House would "be watching whether Russia does or does not uphold its responsibility to use its very considerable influence to restrain and withdraw those irregular militia from the buildings and spaces that they've occupied".

Putin denies his forces have any role in east Ukraine. On Thursday, however, he dropped an identical denial over Crimea, which Russia annexed from Ukraine last month, to admit the Russian army had in fact been deployed there.

In a sign of the current prickly relationship with the West, Kremlin spokesman Dmitry Peskov late Friday told Russian television that U.S. threats of more sanctions on Moscow were "absolutely unacceptable" and "one cannot treat Russia like it is a shameful student".

"Our Western colleagues are trying to push responsibility towards our side. But it must be underlined: it is a collective responsibility," he said.

He also pointedly declared that there are Russian troops "close to the Ukrainian border".

"Some are based there, others have been sent as reinforcements due to the situation in Ukraine," he added.

The comments appeared to be a warning that the situation could quickly degrade if Moscow were punished for a failed implementation of the accord.

NATO believes Russia has around 40,000 troops positioned on its border with Ukraine, in a state of readiness for an invasion.

Putin has asserted he has a "right" to send his army into Ukraine, but that he "very much hoped" he would not have to.

Although the United States has not given a deadline for compliance with the Geneva deal, U.S. Vice President Joe Biden is due to visit Kiev on Tuesday.

He will be meeting leaders who have taken charge since the February ouster of pro-Kremlin former President Viktor Yanukovych, after months of massive and bloody street protests.

Russia refuses to see the new Kiev government as legitimate, and the turmoil in Ukraine's east could prove an obstacle to a planned May 25 presidential election.

On Friday, one of the separatist leaders in the self-declared Donetsk Republic, Denis Pushilin, said he agreed occupied buildings should be vacated -- but only if the leaders in Kiev first leave the buildings "that they are occupying illegally since their coup d'etat" in February.

Yulia Tymoshenko, a former prime minister who is a leading candidate for next month's presidential election, said she held talks with the Donetsk separatists on Friday that left her convinced that "compromise is possible".

In a concession to the Russian-speaking militants, Ukrainian Prime Minister Arseniy Yatsenyuk on Friday pledged safeguards for the Russian language and a broad decentralization of power.

Ukraine's Foreign Minister Andriy Deshchytsya also suggested the authorities would hold off temporarily from any further military action on the ground to give the agreement time to take effect.

"If this does not begin in the next few days then I think after Easter there will be more concrete actions," Deshchytsya told journalists. Easter in Orthodox Ukraine ends on Monday.

Ukraine's military has so far proven woefully inept in its efforts to dislodge the separatists. On Friday, in a rare success, the army said it had recovered two of six armored vehicles captured by rebels during a disastrous military operation earlier in the week.