* Moscow complains situation worse since Ukraine election
* Tense meeting of NATO-Russia council in Brussels
* Demand for U.N. resolution on end to violence
* Fierce battle rages all day in east
(Adds Russian statement on NATO, updates Luhansk fighting)
By Thomas Grove and Mark Trevelyan
DONETSK, Ukraine/MOSCOW, June 2 Russia gave
Ukraine a breathing space on Monday in a multi-billion-dollar
gas dispute but balanced the concession with fierce
denunciations of Kiev and NATO, while fighting raged all day in
Russia accused NATO of whipping up dangerous tensions near
its borders and encouraging Ukraine to use force against
pro-Russian separatists. At a tense meeting in Brussels, the
alliance urged Moscow to stop arming the rebels.
In the eastern city of Luhansk, Ukrainian border guards said
a pro-Russian militia had attacked one of their posts with
automatic weapons and grenade launchers in the early hours,
triggering a prolonged battle about which both sides gave
Ukraine and its Western allies accuse Moscow of fuelling the
pro-Russian uprising that threatens to break up the former
Soviet republic of 45 million people. Russia denies
orchestrating the unrest, and says Ukraine's attempts to end it
by military force are making the situation worse.
In a conciliatory signal, Russia's Gazprom gave
Ukraine until June 9 to resolve the two countries' long-running
row over gas pricing, postponing a threat to cut off supplies as
early as Tuesday.
But two top Russian officials turned up the volume of Cold
War-style rhetoric in the worst East-West crisis since the fall
of Communism a quarter of a century ago.
Foreign Minister Sergei Lavrov said Moscow would submit a
draft resolution to the United Nations Security Council later on
Monday, calling for an immediate end to the violence in eastern
Ukraine and the creation of humanitarian corridors to help
civilians escape the fighting.
In pointed comments aimed at newly elected Ukrainian
president Petro Poroshenko, Lavrov said that Western nations had
assured Russia the situation in Ukraine would improve after the
May 25 election that brought him to power. Instead of that, he
said, "everything is happening in exactly the opposite way".
"People are dying every day. Peaceful civilians are
suffering more and more - the army, military aviation and heavy
weapons continue to be used against them," Lavrov told reporters
In Brussels, Russia's envoy to NATO accused the Western
alliance of exacerbating the crisis.
"We have noticed unprecedented NATO activity near Russia's
borders. It is excessive, inappropriate, and weakens stability,
security and predictability in the Euro-Atlantic region,"
state-run RIA news agency quoted Alexander Grushko as saying.
A NATO spokeswoman said alliance members called on Russia
"to stop the flow of arms and weapons across the border, to stop
supporting armed separatists in Ukraine and to withdraw in a
full and verifiable manner their troops from the Ukrainian
Russia denies arming the rebels or orchestrating the unrest,
although increasing numbers of Russian fighters have been seen
on the separatist side.
President-elect Poroshenko and Ukraine's pro-Western
government have defied Moscow's repeated calls for an end to
what Kiev calls its 'anti-terrorist' operation against armed
separatists in the eastern Donetsk and Luhansk regions, who want
to follow the example of Crimea by splitting from Ukraine and
Poroshenko is due to be inaugurated on Saturday and will
immediately face an array of crises, including the new deadline
in the gas dispute.
Since the overthrow of pro-Russian Ukrainian President
Viktor Yanukovich in February, Russia has demanded a sharp
increase in the price Ukraine pays for gas. Kiev says it cannot
afford it and wants the discounted price it negotiated in the
While the dispute has dragged on, Gazprom has continued
billing Kiev at the higher rate. It says Ukraine already owes it
more than $5 billion in unpaid bills and is running up more debt
at a rate of more than $1 billion per month.
But after Kiev paid off $786 million of its gas debt,
Gazprom announced a six-day extension of the deadline until June
9. Gazprom also said that it would not sue Ukraine's gas
supplier Naftogaz over unpaid bills during the coming week.
The dispute has wider energy implications for Europe, which
gets a third of its gas needs from Russia, and almost half of
these supplies via Ukraine.
Despite a pullback of some of the tens of thousands of
Russian troops on the border with Ukraine, violence increased in
the east of the country at the start of last week, with dozens
of pro-Moscow rebel fighters killed in a government assault.
Many were Russians, whose bodies were sent back across the
In Monday's fighting, Ukrainian security sources said a
force of separatists had occupied the upper floors of an
apartment block and were shooting into the border post on the
southern edge of Luhansk, a city very close to the frontier with
A separatist fighter, Alexander Gureyev, said by telephone
that a Ukrainian fighter plane had shot at the regional
administration building. "There are dead and injured in the
city," he said.
Interfax-Ukraine news agency quoted a senior local health
official as saying that an explosion in the building had killed
two people. Ukrainian authorities denied they had conducted an
Earlier, a border guard spokesman, Oleh Slobodin, said: "We
have eight or nine wounded. The attackers have five dead and
In Geneva, a spokesman for the U.N. Office for the
Coordination of Humanitarian Affairs declined to comment on
Russia's proposal to create humanitarian corridors for civilians
to get out of harm's way.
"Generally, when we talk about corridors, it always needs to
be clear, first of all from where to where? And particularly,
who is going to secure that corridor?" spokesman Jens Laerke
"Because once you say here's a corridor, once people start
moving on that, if there's no one to protect them, then it's
(Additional reporting by Tom Miles in Geneva; Vladimir
Soldatkin, Steve Gutterman and Katya Golubkova in Moscow; and
Richard Balmforth in Kiev; writing by Mark Trevelyan; editing by