By Dmitry Antonov
MOSCOW (Reuters) - The Kremlin on Monday said there were no concrete plans for a summit over Ukraine between Russian President Vladimir Putin and his U.S. counterpart Joe Biden, after the French president said the two leaders had agreed a meeting in principle. At the same time, a Kremlin spokesman noted that Putin 'of course" remains open to such talks.
A summit might offer a possible path out of Europe's biggest military crisis in decades, and financial markets edged higher on the glimmer of hope for a diplomatic solution. [MKTS/GLOB]
However, both Washington and Moscow played down hopes of a breakthrough, and satellite imagery appeared to show Russian deployments closer to Ukraine's border than before.
Western countries accuse Russia of planning an invasion of its neighbour. Moscow denies planning any attack but has demanded security guarantees including a promise that Ukraine would never join NATO.
Nerves were further frayed when the Belarussian defence ministry announced on Sunday that Russia would extend military drills in Belarus that had been due to end. Russia has tens of thousands of troops there, north of the Ukrainian border.
Kremlin spokesperson Dmitry Peskov told reporters that a phone call or meeting between Putin and Biden could be set up at any time, but there were no concrete plans yet for a summit. Tensions were growing, but diplomatic contacts were active and a meeting of foreign ministers was possible this week.
He also said Putin would imminently address an extraordinary session of Russia's Security Council.
The White House said in a statement that Biden had accepted the meeting "in principle" but only "if an invasion hasn't happened".
"We are always ready for diplomacy," White House Press Secretary Jen Psaki said. "We are also ready to impose swift and severe consequences, should Russia instead choose war."
Western countries are preparing sanctions they say would be far-reaching against Russian companies and individuals in the event that Russia invades, including steps to bar U.S. financial institutions from processing transactions for major Russian banks, people familiar with the matter said.
Ukrainian Foreign Minister Dmytro Kuleba, arriving in Brussels to meet his European Union counterparts, urged the bloc to start imposing some sanctions on Russia now to show it was serious about wanting to prevent a war.
The West has so far rebuffed Kyiv's calls to impose tighter sanctions now, arguing that to work as a deterrent they must be saved as a potential punishment if Russia invades.
European Union foreign policy chief Josep Borrell said he still saw room for diplomacy, but would convene an extraordinary EU meeting to agree sanctions "when the moment comes".
U.S. stock index futures rallied on prospects for further diplomacy, the euro rose and stocks steadied around the world.
French President Emmanuel Macron's office said in a statement that he had pitched a summit on "security and strategic stability in Europe" to both leaders.
Summit Plans Unclear
Macron's office and the White House said the substance of the plan would be worked out by U.S. Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov during a meeting planned for February 24.
French Foreign Minister Jean-Yves Le Drian said on Twitter that he would hold talks with Lavrov later on Monday.
Ukraine welcomed a possible summit between but said it must be included in any decisions aimed at resolving the crisis.
"No one can resolve our issue without us," Ukraine's top security official Oleksiy Danilov told a briefing. "Everything should happen with our participation."
Macron's announcement followed a volley of phone calls between Macron, Biden, Putin, Zelenskiy and British Prime Minister Boris Johnson.
U.S.-based satellite imagery company Maxar on Sunday reported multiple new deployments of Russian military units in forests, farms, and industrial areas as little as 15 km (9 miles) from the border with Ukraine.
Blinken said the extension of the exercises in Belarus made him more worried that Russia was on the brink of an attack.
In a letter to U.N. human rights chief Michelle Bachelet seen by Reuters, the United States said an invasion "could create a human rights catastrophe" and might include rounding up and killing opponents.
Washington has also repeatedly raised concerns that Russia could manufacture a pretext for an invasion with a so-called false flag attack designed to look as if it had been carried out by Ukraine. Russia accuses the West of hysteria.
Sporadic shelling across the line dividing Ukrainian government forces and pro-Russian separatists in the east has intensified since Thursday, with both sides trading blame.
The separatists have been busing out civilians, accusing Kyiv of planning an attack. Ukraine and the West view the rebels as Russian proxies, escalating to provide Moscow with a justification to invade.
Sounds of fighting were heard again on Monday, including a blast in the centre of the separatist-held city of Donetsk. The cause could not be determined.
Russia's FSB intelligence service said a shell fired from Ukrainian territory had hit a Russian border guard post in the city of Rostov, but that no one had been hurt.
The rebels said two civilians were killed in shelling by Kyiv government forces, Russia's RIA news agency said. Russian media reported 61,000 evacuees from east Ukraine had crossed into Russia.
Kyiv denies firing on civilians or across the border into Russia. Washington says accusations that Kyiv would intentionally escalate the conflict are absurd at a time when Russia has massed troops on the border.
(Reporting by Reuters bureaux; Writing by Kevin Liffey; Editing by Peter Graff)