* Crimea parliament votes to join Russia, referendum March
* Putin says "differences" with U.S. remain after call with
* Obama says referendum would violate international law
* EU warns Russia of sanctions if no negotiated solution
* OSCE military monitors barred from entering Crimea
By Alissa de Carbonnel and Luke Baker
SIMFEROPOL, Ukraine/BRUSSELS, March 6 Crimea's
parliament voted on Thursday to join Russia, and its
Moscow-backed government set a referendum in 10 days, in a
dramatic escalation of the crisis over the Ukrainian region that
drew a sharp riposte from U.S. President Barack Obama.
Obama ordered sanctions on those responsible for Moscow's
military intervention in Ukraine, including bans on travel to
the United States and freezing of their U.S. assets.
He echoed European Union leaders and the pro-Western
government in Ukraine in declaring that the proposed referendum
would violate international law.
Obama also held a one-hour call on Thursday with Russian
President Vladimir Putin, their second phone conversation in six
days, and urged him to accept the terms of a potential
diplomatic solution to the crisis.
Putin said afterwards that Russia and the United States were
still far apart over the crisis. In a statement released by the
Kremlin early on Friday, the Russian leader said Kiev's new
authorities had imposed "absolutely illegitimate decisions on
the eastern, southeastern and Crimea regions".
"Russia cannot ignore calls for help in this matter and it
acts accordingly, in full compliance with the international
law," Putin added.
The sudden acceleration of moves to bring Crimea, which has
an ethnic Russian majority and has effectively been seized by
Russian forces, formally under Moscow's rule came as EU leaders
held an emergency summit, groping for ways to pressure Russia to
back down and accept mediation.
The EU condemned Russian actions in Crimea as illegal,
voiced support for Ukraine's territorial integrity but took only
minor steps suspending talks with Moscow on visas and a new
investment pact while warning of tougher steps if there is no
negotiated solution within a short period.
In a signal to Moscow, Obama announced plans to punish
Russians and Ukrainians involved in what he called "threatening
the sovereignty and territorial integrity of Ukraine". A U.S.
official said Putin was not on the list of those to be
"The proposed referendum on the future of Crimea would
violate the Ukrainian constitution and violate international
law," Obama told reporters at the White House. "Any discussion
about the future of Ukraine must include the legitimate
government of Ukraine."
After talks in Rome, U.S. Secretary of State John Kerry said
Russian Foreign Minister Sergei Lavrov was personally delivering
proposals to Putin to end the crisis in Ukraine.
"We have agreed to stay in close touch in order to see if
there is a way forward to try to get to a negotiating table to
get the parties necessary to be able to stabilize this," Kerry
Kerry said the executive order signed by Obama on Thursday
provided a legal framework for imposing sanctions but also left
open the door for dialogue.
The White House said Obama emphasized to Putin in the call
on Thursday that Russia's incursion into Ukraine was a violation
of Ukraine's sovereignty.
Obama outlined the terms of a diplomatic "off-ramp" that
U.S. officials are promoting, in which Russia would pull back
troops to bases in Crimea, allow in international monitors to
ensure the rights of ethnic Russians are respected and consent
to direct talks with Ukraine officials.
Obama also spoke to Japanese Prime Minister Shinzo Abe and
agreed that Russia's actions were "a threat to international
peace and security", the White House said. Tokyo said in a
statement that Abe had given his support to Obama's efforts to
resolve the crisis in the 40-minute phone call.
The crisis has put Japan in a tight diplomatic spot, as it
seeks to balance support for its key ally the United States with
a recent push to improve ties with Russia driven by a need to
increase energy imports to replace lost nuclear power.
The Pentagon announced a large-scale air force exercise in
Poland that Washington's ambassador to Warsaw said had been
augmented to reassure U.S. allies in the region in the light of
the Ukraine crisis.
The U.S. House of Representatives overwhelmingly passed a
bill backing loan guarantees for the new government in Kiev. The
U.S. Senate is expected to consider a similar bill backing $1
billion in loan guarantees next week.
The crisis began in November when Ukraine's then-president,
Viktor Yanukovich, under Russian pressure, turned his back on a
trade deal with the EU and accepted a $15 billion bailout from
Moscow. That prompted three months of street protests leading to
the overthrow of Yanukovich on Feb. 22.
Moscow denounced the events as an illegitimate coup and
refused to recognise the new Ukrainian authorities.
The Crimean parliament voted overwhelmingly on Thursday "to
enter into the Russian Federation with the rights of a subject
of the Russian Federation".
The decision, which diplomats said could not have been made
without Putin's approval, raised the stakes in the most serious
East-West confrontation since the end of the Cold War.
The vice premier of Crimea, home to Russia's Black Sea Fleet
in Sevastopol, said a referendum on the status would take place
on March 16. All state property would be "nationalised", the
Russian rouble adopted and Ukrainian troops treated as occupiers
and forced to surrender or leave, he said.
Russian stocks fell and the rouble weakened further after
the referendum news. Moody's ratings agency said the standoff
was negative for Russia's sovereign creditworthiness.
On the ground, a mission of 35 unarmed military observers
from the pan-European Organisation for Security and Cooperation
in Europe was stopped from entering Crimea by unidentified men
in military fatigues when they travelled from the port of
Odessa, Poland's defence minister said.
In Brussels, European Council President Herman Van Rompuy
outlined a three-stage plan to try to resolve the crisis, while
announcing the EU would sign the political parts of a far-
reaching agreement with Ukraine before May 25 elections there,
and offer the country extensive aid and trade benefits.
Unless Moscow opens negotiations with Ukraine and an
international "contact group" soon, the EU would move to travel
bans and asset freezes on Russian officials, and boycott a
planned June Group of Eight summit in the Olympic venue Sochi.
If Russia took action that destabilised Ukraine further,
there would be "grave consequences" for bilateral economic ties,
he said, without giving any deadlines. Poland's prime minister
said the EU talks on sanctions had been "stormy", hinting at
frustration at his inability to achieve stronger measures, which
require a unanimous decision by all 28 member states.
The centre-right European People's Party, a grouping that
includes a dozen heads of state and government in the European
Union, is set to declare on Friday that Ukraine may apply for EU
membership, according to a draft statement seen by Reuters.
Putin has cited threats to Russian citizens to justify
military action in Ukraine, as he did in Georgia in 2008. Far
from seeking a diplomatic way out of the present crisis, Putin
appears to have chosen to create facts on the ground before the
West can agree on more than token action against him.
Ukrainian Prime Minister Arseny Yatseniuk said after meeting
EU leaders that Ukraine's armed forces would act if Russian
military intervention escalated any further into Ukrainian
territory. "We are ready to protect our country," he said.
Military experts say Kiev's small and underequipped forces
are no match for Moscow's superpower might.
As expected, the EU summit was unwilling to adopt more than
symbolic measures against Russia, Europe's biggest gas supplier,
because neither industrial powerhouse Germany nor financial
centre Britain is keen to trigger a trade war.
France has a deal to sell warships to Russia that it is so
far not prepared to cancel, London's banks have profited from
facilitating Russian investment, and German companies have $22
billion invested in Russia.
The European Commission has announced aid of up to 11
billion euros ($15 billion) for Ukraine over the next couple of
years provided it reaches a deal with the International Monetary
Fund, entailing painful reforms like ending gas subsidies.
European Central Bank chief Mario Draghi said the crisis had
already had a major impact on the Russian and Ukrainian
economies, but little effect so far on the euro zone.