Moscow hails Ukraine self-rule olive branch for east

  Russia hailed Wednesday Ukraine's offer of self-rule for separatist rebels in the east under a peace plan seen as the best chance yet of halting five months of bloody warfare, AFP reports.

Insurgent leaders had initially given a mixed response to the legislation adopted by Ukrainian MPs on Tuesday, describing it as a positive move but at the same time insisting they would not be dictated to by Kiev.

The autonomy offer was drawn up under a peace plan backed by both Kiev and Moscow 12 days ago that has eased -- but not halted -- deadly violence around insurgent strongholds in eastern Ukraine.

Moscow, echoing comments by both Washington and the European Union, said it was a "step in the right direction" towards ending a conflict that has killed almost 2,900 people and sent East-West tensions spiralling.

"All of this lays the foundation for the launch of a substantial constitutional process in Ukraine including the start of dialogue with a view to facilitating national reconciliation and agreement in the country," the Russian foreign ministry said.

Lawmakers unanimously approved the "special status" law just moments before ratifying a landmark EU pact that steers Ukraine away from Russia's sphere of influence.

  Capitulating to Moscow? 

But the peace overture to the rebels appears to fit with what analysts see as President Vladimir Putin's strategy of splintering the country to create a Russian-speaking zone that would depend more on Moscow than Kiev.

Nationalist leaders have already accused President Petro Poroshenko of capitulating in the face of Russian "aggression" that suddenly turned the tide against Ukrainian forces last month.

Deadly fighting erupted again on Wednesday around the flashpoint city of Donetsk, scene of almost daily shelling despite the ceasefire deal signed on September 5.

Donetsk city hall said two civilians were killed near a market that lies just a few kilometres (miles) away from the airport frontline and was left in ruins by another bout of deadly shelling earlier this week.

Russian Foreign Minister Sergei Lavrov, speaking during a visit to Addis Ababa, said "the ceasefire is holding" despite some violations he blamed on the Ukrainian army, Russia's RIA Novosti news agency reported.

  'Child of war' 

Many residents of the war-battered region remain deeply pessimistic that any political deals will bring an end to the bloodletting.

"I was born in 1941, a child of war, and now I will die during war. What's it all for?" said 73-year-old Tatiana Semenchenko after a rocket smashed into a building in the working class district of Kievsky.

Since the truce, around 30 civilians and Ukrainian servicemen have been killed, mostly around Donetsk, with both sides accusing the other of repeated truce violations.

Prime Minister Arseniy Yatsenyuk -- who has accused Putin of seeking to eliminate Ukraine -- declared that the armed forces would remain on "full combat readiness".

"Russia is definitely not going to grant us peace or stability," he said.

The new legislation gives three years of limited self-rule to the regions of Donetsk and Lugansk known collectively as Donbass, calls for local polls in December, and grants amnesty to rebel fighters.

It also guarantees the right for Russian to be used in all state institutions and for the regions to establish closer ties with local authorities across the border -- two clauses that won Moscow's particular approval.

Both the United States and Europe hailed the legislation as a sign of Kiev's commitment to peace but demanded that Russia and the rebels live up to their side of the bargain.

Moscow has been hit by waves of punishing EU and US sanctions since its annexation of Crimea in March.

But further unnerved its neighbours Tuesday when it said it would boost troop numbers in the Black Sea peninsula because of the "worsening" crisis in Ukraine and the buildup of foreign troops on its border -- an apparent reference to US-led war games in western Ukraine.

Pro-Moscow rebels gave it a cautious welcome but also defiantly insisted it would not stop their fight for full independence as part of "Novorossiya" ("New Russia").

Donetsk "deputy prime minister" Andrei Purgin told AFP the self-rule offer was "a positive signal" that deserved "careful study", a stance echoed by Lugansk rebel leader Alexei Karyakin.

But Donetsk "prime minister" Alexander Zakharchenko bluntly said it was up to the local authorities not Kiev to "decide what elections to hold and when".

Meanwhile, Poroshenko heads to Washington for a meeting with US President Obama on Thursday, pushing for closer ties between his former Soviet state and the West.

The visit comes just two days after the European and Ukrainian parliaments held simultaneous votes to ratify a political and economic pact whose rejection by the former government last year set in train the current crisis.

Poroshenko said the adoption of the deal was Ukraine's first step towards EU membership, declaring: "Tell me, who will now dare to shut Ukraine's doors to Europe?"

EU leaders hailed it as a "blueprint for Ukraine's transformation into a modern and prosperous European democracy", although the two sides have agreed to delay a free trade deal in a move that appears to make concessions to both Kiev and Moscow.

by Anna SMOLCHENKO with Tanya WILLMER in Kiev