Putin, Hollande in surprise Ukraine talks amid warship controversy

ALMATY, Kazakhstan - French President Francois Hollande will make an unscheduled stop in Moscow on Saturday to discuss the Ukraine crisis with his Russian counterpart Vladimir Putin amid a bitter dispute over France's refusal to deliver a warship.

Controversy over France's decision to delay delivery of the warship to Russia under pressure from its Western allies due to Moscow's backing of rebels in eastern Ukraine was likely to hang over the surprise meeting.

Hollande will stop in the Russian capital on his way back home from a visit to Kazakhstan, a day after vowing to work towards a "de-escalation" in the Ukraine crisis, his office said in a statement.

The meeting comes amid reports of fresh clashes in eastern Ukraine that have threatened to undermine a truce set to take effect next week.

Meanwhile, Putin has showed no signs of backing down, accusing the West this week of seeking to undermine Russia with sanctions.

Moscow is fuming over Hollande's decision to delay delivery of a massive Mistral-class helicopter carrier to the Russian navy.

Delivery of the warship has been on ice due to Western concerns of Moscow's involvement in eastern Ukraine, where pro-Russian separatists have fought with Kiev's forces since April, leaving some 4,300 people dead.

The eight-month conflict has plunged relations between the West and Russia to levels not seen since the Cold War.

Hollande warned on Friday that the crisis posed "serious threats to the economy of the entire region" and vowed "to work together to find all the points that will allow... to initiate a de-escalation".

Putin and Hollande are expected to meet at the Vnukovo airport outside Moscow after 4:00 pm local time (1300 GMT), the Kremlin said.

It was unclear who initiated the meeting, but the Kremlin said that Putin received a call Friday evening from Kazakhstan President Nursultan Nazarbayev following his meeting with Hollande.

In a flurry of diplomacy, Hollande also spoke with Ukrainian President Petro Poroshenko before meeting Putin, Kiev said.

Ukraine and rebels have agreed to a new ceasefire to take effect on December 9, calling it a "Day of silence". A source in the office of Poroshenko said Kiev will begin to withdraw heavy weapons from the eastern frontline the following day if the truce is observed by the rebels.

The truce will be the latest of several agreements to halt fire along the frontline. Previous deals have been largely ineffective as both sides continue to accuse each other of indiscriminate rocket damage to residential areas.

The pro-Kiev governor of the eastern Lugansk region Gennadiy Moskal on Saturday said two civilians had been killed in a village 15 kilometres north-west of Lugansk, while a security spokesman alleged a convoy of over 100 trucks and armoured vehicles had moved across the border from Russia Friday.

Mistral 'obligations'

Hollande last week delayed the delivery of the first of two warships - part of the contract worth 1.2 billion euros ($1.5 billion) - "until further notice" while Defence Minister Jean-Yves Le Drian on Friday said the ships may never be delivered.

Paris faces hefty fines if it breaches the contract with Russia, but is under pressure from its allies around the world if it hands over the hot-button technology at a time of Moscow's growing militancy and the Ukraine crisis still raging.

Russia's Foreign Minister Sergei Lavrov said Friday that France is damaging its reputation by not abiding to the agreement.

"They have to fulfil all the obligations under the contract," Lavrov said.

Hollande, facing a prospect of having two hugely expensive ships on his hands that he cannot sell to another client, has insisted that the contract has not yet been broken.

Russian officials have also stayed clear of ultimatums, with the 400-strong Russian crew of the mammoth assault ships for the time being still in France's Saint-Nazaire, the city where the shipyard is located and where they are currently training.

However, Putin this week showed no sign of backing down from his policy on Ukraine.

"Every time someone believes Russia has become too strong, independent, these instruments get applied immediately," he added, referring to the economic sanctions that have weighed on the country's economy at a time of falling oil prices.