| DONETSK Ukraine
DONETSK Ukraine Pro-Russian separatists in eastern Ukraine staged swearing in ceremonies for their leaders on Tuesday after votes dismissed as a farce by Kiev, which says they violated terms of a peace plan to end a war that has killed more than 4,000 people.
Warning of the threat of new offensive by Moscow-backed rebels, Ukraine's leader said newly-formed army units would be sent to defend a string of eastern cities.
NATO's highest ranking officer, a U.S. general, said conditions were now in place to create a "frozen conflict", a term the West uses to describe rebel regions carved out of other ex-Soviet states that Moscow protects with its troops.
The inauguration ceremonies in east Ukraine took place even as tens of thousands of people marched in Moscow for "Unity Day", a nationalist holiday celebrating a 17th century battle, revived under President Vladimir Putin to replace the Soviet-era celebration of the Bolshevik revolution. Ukraine featured heavily in speeches for the occasion.
Most fighting has halted in the war in eastern Ukraine since September, when Kiev agreed to a truce after its forces were pushed back by what it and Western countries say was an incursion by armored columns of Russian troops.
But the frontline remains dangerous and tense, with both sides complaining of shooting nearly every day. Artillery from the direction of the wreckage of Donetsk's international airport, still under government control, thudded during the rebel leader's inauguration in the city.
Moscow says the election of Alexander Zakharchenko and Igor Plotnitsky as leaders of the Donetsk and Luhansk "people's republics", which jointly call themselves "new Russia", means that Kiev should now negotiate with them directly.
Kiev has always rejected this, describing the rebels as Russian-backed "terrorists" or "bandits", with no legitimacy.
The worry for the West is that Moscow, which has already annexed Ukraine's Crimea peninsula, will now also exert control over eastern Ukraine's industrial Donbass region in perpetuity, as it has done for two decades in parts of Moldova and Georgia that broke away when the Soviet Union collapsed.
"I'm concerned that the conditions are there that could create … a frozen conflict," said U.S. Air Force General Philip Breedlove, the highest-ranking NATO officer, said in Washington.
Russia's border with east Ukraine had softened to the point of becoming completely porous, while the line inside Ukraine between government and rebel territory had hardened, he said.
President Petro Poroshenko met his security chiefs and told them he remained committed to a peaceful solution to the conflict, even though he said a peace plan and truce agreed in Minsk in September had been violated by Russia and the rebels.
Kiev says the Minsk agreements provided only for the election of local officials in the east under Ukrainian law, and not for separatist ballots to install leaders of breakaway entities who seek close association or even union with Russia.
Kiev and the West also say Moscow is continuing to provide military support for the rebels.
A foreign ministry spokesman said 100 Ukrainian soldiers had been killed since the ceasefire came into force. Kiev's military spokesman said there had been more shooting incidents recently and NATO's secretary-general, Jens Stoltenberg, said in Brussels that Russian troops were moving closer to the border with Ukraine while Russia continued to train the rebels.
BALLOONS AND COSSACKS
In Donetsk, an industrial city which had a million people before the war, 38-year-old former coal mine electrician Zakharchenko was sworn in as head of the self-proclaimed "Donetsk People's Republic".
One of the few top guerrilla commanders in eastern Ukraine who comes from Donetsk rather than Russia, Zakharchenko has led the separatists since August when he took over from a Russian. He was elected on Sunday, along with Plotnitsky in neighboring Luhansk, in votes that Kiev and the West denounced as illegal.
At the ceremony in a Donetsk drama theater, Zakharchenko swore to "honestly serve the interests of the people of the Donetsk People's Republic".
Balloons floated onto the stage while Cossacks in scarlet and black uniforms and dancers in traditional peasant garb shared the theater with Zakharchenko's honor guard of heavily-armed fighters, some with Russian flag patches on their arms.
A Russian parliamentarian, Alexei Zhuravlyov, told the audience the elections "were democratic and clean which many countries could envy, including Western ones".
Before the ceremony, another separatist figure, Andrei Purgin, said: "We are starting history with this inauguration and what happens today will be repeated. We are laying down the traditions of the Republic."
"SPIRITUAL UPSURGE" Putin has pressed on with Russia's campaign in Ukraine despite U.S. and European economic sanctions.
"Dear friends, this year we have had to face difficult challenges. And as has happened more than once in our history, our people responded by consolidating and with a moral and spiritual upsurge," Putin told a Unity Day gala, alluding to the conflict without mentioning sanctions or Ukraine directly.
"The desire for justice, for truth has always been honored in Russia. And threats will not force us to abandon our values and ideals."
At an open air concert in Moscow following the parade, politicians called on Putin to recognize the results of the rebel elections. Putin has yet to do so, although Moscow said it would before the votes were held.
Since the truce brought by the Minsk agreements, which Russia signed along with Ukraine and rebel leaders, Putin appears to have set course for a long-term face-off that will leave the Donbass internationally recognized as part of Ukraine but beyond Kiev's control.
Russia has used such tactics to hobble the aspirations for Western integration of Moldova and Georgia, where breakaway enclaves have enjoyed Russian protection since the early 1990s.
When Georgia tried to retake a separatist enclave in 2008, Moscow swiftly invaded to protect it. An official from that region, South Ossetia, spoke at Zakharchenko's inauguration.
In recent weeks, Russia and Ukraine reached an interim agreement on gas supplies, allowing them to resume the most important part of their economic relations and make the status quo more stable, without resolving the separatist conflict.
But Kiev still has wider ambitions for improved trade ties with the West, including eventual membership in the EU, which will be harder to achieve as long as nearly 10 percent of its population and a larger slice of its industrial output is in territory controlled by armed men who profess loyalty to Russia.
The rebels in eastern Ukraine rose up in April after Moscow seized the Crimea peninsula following the overthrow of a pro-Russian president in Kiev. More than 4,000 people have been killed in months of fighting since, including 298 aboard a Malaysian airliner shot down over rebel territory in July.
From June through August Ukrainian forces were on the offensive, but the momentum rapidly swung back after what the West says was a ground assault by the Russian military.
Moscow officially denies its troops operate in eastern Ukraine, although many have died there.
After a Ukrainian parliamentary election on Oct. 26 that saw parties sympathetic to Moscow all but wiped out, Poroshenko is now fully supported by a pro-Western power structure determined to stop the break-up of the country. He may come under pressure to take a firmer line.
Poroshenko said on Tuesday he wanted parliament to scrap a law offering "special status" to eastern regions, which would have given Donetsk and Luhansk limited rights to run their own affairs and shield separatist fighters from prosecution.
He would propose a new law to provide a "special economic zone" for the region and set a new date for hoped-for Ukrainian-run local elections, originally planned for early December.
(Additional reporting by Natalia Zinets and Richard Balmforth in Kiev,; Timothy Heritage and Katya Golubkova in Moscow, Adrian Croft in Brussels,; Writing by Richard Balmforth; Editing by Peter Graff)