(Updates with Merkel-Hollande joint statement in sixth paragraph. For more on the crisis in Ukraine, see EXT2.)
June 14 (Bloomberg) -- Pro-Russian rebels shot down a transport plane in eastern Ukraine, killing 49 servicemen and threatening to ratchet up east-west tensions over suspicions President Vladimir Putin is backing the uprising.
The killing of the 40 soldiers and nine crew was the deadliest strike on Ukrainian forces since separatists seized government buildings on April 6. The IL-76 aircraft went down as it approached Luhansk airport at 1:10 a.m. local time under anti-aircraft and machine-gun fire, authorities including the Kiev-based Prosecutor General’s Office said today.
“All linked to this terrorist action of such scale will be punished, for sure,” Ukraine President Petro Poroshenko said on his website, announcing tomorrow will be a day of national mourning. German Chancellor Angela Merkel and French President Francois Hollande told Putin they were very worried about continued fighting, saying conditions for de-escalation need to be put in place.
The incident, which may fuel tensions between Moscow and Washington, Ukraine’s main ally, came after the U.S. accused Moscow of sending heavy weapons, including old-model tanks and multiple-rocket launchers, to the rebels, who say they are fighting a war against fascism and to join Russia. Moscow is also threatening to cut off natural gas supplies to Ukraine.
Images posted on YouTube, which couldn’t be independently confirmed, showed the night sky above Luhansk airport illuminated by a flash of light and fire.
Hollande and Merkel “emphasized the importance of rapidly reaching a cease-fire agreement in Ukraine,” Hollande’s office said in a statement. Measures were needed “in particular avoiding the movement of fighters and arms across the border and calling on the separatists to stop fighting,” they said.
The U.S. has information that at least three tanks crossed the border from Russia on June 12, State Department spokeswoman Marie Harf said yesterday. The military equipment came from a “deployment site” in southwest Russia, Harf said.
Ukraine has shut a 248-kilometer stretch of its border with Russia and killed more than 250 members of illegal armed groups in the last 24 hours, according to the website of the president’s office.
Fighting in Ukraine’s east continued. Five border guards were killed and seven wounded today when rebels attacked a convoy near the eastern coastal town of Mariupol, the State Border Service said on its website. Clashes also spread to Shchastya, the city council of Luhansk said in a statement. Shchastya is about 20 kilometers (12 miles) north of Luhansk and 50 kilometers from the Russian border.
Rebels claimed to have shot down an SU-25 fighter jet over Horlivka, according to Russia’s Interfax news service. The pilot ejected and was captured, it said.
About 100 protesters gathered outside the Russian embassy in Kiev and some hurled stones and firecrackers, Ukraine’s Channel 5 television reported.
Clashes between Ukrainian authorities and pro-Russia separatists led to a border incident yesterday. A Ukrainian armored personnel carrier crossed 100 meters (330 feet) to 150 meters into Russian territory in pursuit of insurgents. That prompted a protest from Putin.
In addition to the worsening violence, Ukraine is bracing for a halt in natural gas flows in a continuing dispute over payments. Ukrainian Prime Minister Arseniy Yatsenyuk has instructed authorities to prepare for a gas cut-off after a deadline set by Russia’s OAO Gazprom for Ukraine’s past payments for the fuel expires on June 16.
Negotiations will resume in Kiev today, the European Commission said in an e-mailed statement. Energy Commissioner Guenther Oettinger will meet Ukrainian Prime Minister Arseniy Yatsenyuk, Energy Minister Yuri Prodan, Naftogaz Ukrainy Chief Executive Officer Andriy Kobolyev and Gazprom CEO Alexey Miller.
While Gazprom, which is claiming $1.95 billion, is willing to compromise, it won’t be pressured into a deal, spokesman Sergei Kupriyanov said.
The showdown over gas shipments heaps pressure on Poroshenko, who’s struggling to fulfill a pledge to halt the unrest after peace negotiations that include Russia so far failed to yield a cease-fire. The European Union, dependent on Russian gas piped through Ukraine for about 15 percent of its supplies, is trying to broker a deal to avoid interruptions seen during comparable disputes in 2006 and 2009.
Gazprom rescinded a price discount granted to Ukraine in December citing the country’s mounting debt, while Russia stripped its neighbor of a 2010 export-duty break that it exchanged for a lease on its Black Sea fleet’s port in Crimea, a region Putin annexed in March.
Ukraine refused to pay after Russia raised the gas price by 81 percent in April.
Ukraine’s hryvnia, this year’s worst-performing currency against the dollar with a 30 percent plunge, fell 0.2 percent this week in Kiev, data compiled by Bloomberg showed. The ruble was little changed.
--With assistance from Ewa Krukowska in Luxembourg, Daria Marchak and Kateryna Choursina in Kiev, James G. Neuger in Brussels, Mark Deen in Paris, Terry Atlas in Washington, Elena Mazneva in Moscow and Anna Shiryaevskaya in London.