* No sign of compromise in standoff with protesters
* Yanukovich says Ukraine needs close trade ties with Moscow
* U.S.'s Nuland, EU's Ashton in Kiev for talks
(Recasts with Yanukovich, other details)
By Richard Balmforth and Gareth Jones
KIEV, Dec 10 Ukrainian President Viktor
Yanukovich gave no ground on Tuesday to protesters who want Kiev
to move closer to the European Union, insisting his government
needs to deepen trade ties with Russia instead.
In his first public appearance since meeting Russia's
President Vladimir Putin last Friday, Yanukovich ignored the
demands of pro-Europe protesters, hundreds of thousands of whom
have taken to the streets in the past two weeks, including
thousands camped out round-the-clock in freezing temperatures.
"We cannot talk about the future without talking about
restoring trade relations with Russia," Yanukovich said in
televised comments. He added he was also committed to European
integration - wording he has often used since his government
turned its back on a trade pact with the EU on Nov. 21.
The protesters, who range from liberals to far-right
nationalists, say Yanukovich and his government must resign.
They are maintaining a tented camp in the snowbound capital's
vast Independence Square and occupying public buildings, defying
riot police who late on Monday pushed them from some streets.
The crisis has revealed stark divisions in the country of 46
million between those, mainly from the Russian-speaking east,
who view Moscow as a source of stability and those, mainly from
the Ukrainian-speaking west, who want to join the European
mainstream and leave the orbit of the former Soviet master.
The crisis has weighed on an economy already on the brink of
bankruptcy. The cost of insuring Ukrainian debt rose to the
highest in four years on Tuesday. Bond prices fell sharply.
In a flurry of diplomacy, U.S. assistant secretary of state
Victoria Nuland and EU foreign policy chief Catherine Ashton
both flew to Kiev. Nuland met the leaders of three main
opposition parties. Ashton expressed concern that one of the
parties' offices was raided by masked police on Monday.
Protesters, particularly those occupying City Hall a stone's
throw from Independence Square, say they are braced for police
action to eject them.
Police have largely shown restraint since Nov. 30, when they
injured scores of demonstrators in clashes. Washington and the
EU have urged authorities not to allow police violence.
Dozens of riot police removed barricades leading to the
presidency, cabinet offices and parliament overnight but there
were no clashes. Protesters regrouped at Independence Square.
Their 24-hour vigil in tents replays a tactic from the
"Orange Revolution" in 2004 which successfully overturned a
fraudulent election victory by Yanukovich. Ilya Shutov, an
ex-miner from the eastern city of Donetsk, said the protesters
would stay on the square until Yanukovich left office.
"We were for the EU association agreement because we thought
it would force our authorities to be civilised. Their refusal of
Europe is a refusal to be civilised," he said.
Yanukovich, in what was billed as a first step towards
solving the crisis through talks involving opposition parties,
met three former Ukrainian presidents on Tuesday. But his
televised comments showed no readiness to reverse policy.
Nor did he give any details of last Friday's talks with
Putin, though he said Moscow had agreed to discuss the price
Ukraine pays for Russian gas - long a bone of contention. He
spoke dismissively of terms for an International Monetary Fund
loan, a sign he is not relying on the West for cash.
The opposition suspects Yanukovich may be readying to take
Ukraine into a Moscow-led customs union, a prospect that brought
hundreds of thousands of angry protesters to a rally on Sunday
where demonstrators tore down and smashed a giant statue of
Soviet founder Vladimir Lenin.
EU leaders say their trade pact would have brought
investment, but Ukraine's Soviet-era industry relies on Russian
natural gas, giving the Kremlin enormous leverage.
Kiev is due to pay just under $4 billion in debt repayments
and Russian gas bills in the first three months of 2014. Its
foreign reserves have been eroded to prop up the local hryvnia
currency. Central Bank figures on Friday revealed only enough
foreign currency on hand for less than two months of imports.
The IMF has pushed Ukraine to raise the domestic price of
gas and allow the currency to float more flexibily, but the
government has refused. If the Fund continued to insist on
conditions then "such credit is not needed", Yanukovich said.
Nuland arrived in Kiev from talks in Moscow, where the U.S.
embassy said she expressed "deep concern" about the situation in
Ukraine and urged Russia to use its influence to press for
"peace, human dignity and a political solution".
The EU's Ashton expressed concern at a raid by masked police
on the Kiev offices of jailed opposition leader Yulia
Tymoshenko's political party. The EU considers Tymoshenko a
political prisoner and had sought her freedom as part of the
negotiations for the now-mothballed trade pact.
"I call on the Ukrainian authorities to exercise utmost
restraint and refrain from any further use of force, in order to
give space for a negotiated solution out of the current
political stalemate," Ashton said in a statement.
Russia's State Duma, the lower house of parliament, approved
a non-binding statement accusing Western nations of interfering
in Ukraine and said the protesters in Kiev were destabilising
the country. It urged the West to "stop mounting external
pressure on the politics of a country that is brotherly to us".
(additional reporting by Pavel Polityuk, Natalia Zinets;
Writing by Gareth Jones and Richard Balmforth Editing by Peter