KYIV - Ukrainian President Volodymyr Zelensky on Thursday declared martial law in the country after Russia started a military operation against Ukraine.

In a video address, Zelensky said his country is under attack. According to the Interior Ministry, military depots and airfields in the capital were hit by missiles.

In Kyiv, explosions were heard at Boryspil International Airport and other places across the city, according to media reports. The country's airspace was closed for civilian aircraft.

The Ukrainian crisis has worsened with the United States, the United Kingdom, Germany, Japan and Australia imposing sanctions on Russia after Russian President Vladimir Putin recognized the independence of Ukraine's breakaway enclaves of Donetsk and Luhansk on Monday. But apart from geopolitical factors, other factors are also at play, most importantly, the fight for economic interests, behind the intensifying confrontation between the US and Russia over Ukraine.

The US' shale gas production has surged in recent years. Between 2016 and 2020, US natural gas production increased from 727.4 billion cubic meters to 914.6 billion cubic meters, accounting for 85 percent of the increase in global natural gas supply.

Rising production has also made the US one of the main exporters of natural gas in the world. For instance, the US exported 137.5 billion cubic meters of natural gas in 2020, accounting for 11 percent of the global natural gas trade, second only to Russia. By the end of this year, the US is likely to have the world's largest liquefied natural gas export capacity, by overtaking Australia and Qatar.

About 80 percent of the natural gas the US produces is consumed domestically, with rest being exported. About 55 percent of the natural gas the US exported in 2020 was supplied to Canada and Mexico through pipelines. It's hard for the US to further increase imports to the two countries, since Mexico has limited demands while Canada itself is a major natural gas producer too.

And although Mexico's demand for natural gas has not changed much, the same cannot be said about Canada, because it is one of the major natural gas producers in the world.

So the US is desperate to explore new buyers for its natural gas.

About 41.7 percent of the US' LNG exports in 2020 was destined for the European market, followed by Japan, the Republic of Korea and China, which together account for 30.6 percent. But China, whose demand for natural is high, imports only 5 percent of the US' LNG exports, which is unlikely to change given the worsening relations between the two sides.

Also, compared with the main LNG exporters to the Northeast Asian market such as Qatar and Australia, the US has many disadvantages such as high extraction costs and long transportation distances. Besides, in the medium to long term, US LNG will face fierce competition from high-quality but relatively cheap Russian pipeline natural gas. So it is difficult for the US to become the main LNG exporter to countries such as Japan and the ROK.

That is precisely why the strategic significance of the European market has become increasingly important for the US.

As the world's third-largest natural gas consuming region, Europe is highly dependent on natural gas imports and has long been the largest buyer of the US LNG. And the fact that Europe is expeditiously transforming its energy structure to achieve carbon neutrality has raised the demand for natural gas in the region, which the US wants to capitalize on.

But for years, Europe has been highly dependent on Russian pipeline gas. In fact, it imports more than 40 percent of its natural gas from Russia. Therefore, if the US wants to change the pattern of the existing natural gas market in Europe, it has to find a way to push Russia out of the European market.

Since the intensifying standoff between Russia and Ukraine and the resulting Western sanctions against Moscow will halt the supply of Russian natural gas to Europe creating fuel shortage in the region, the US sees it as a golden opportunity to increase its LNG exports to the region.

But the high cost of US LNG still makes it difficult for Washington to squeeze Moscow out of the European market. Russia's production cost has remained at $0.75-0.9 per million British thermal units (MMBtu) in recent years, while the US' shale gas extraction cost is about $1.6-3/MMBtu. Plus, the transportation cost of US LNG is also higher than Russian pipeline gas, because the US needs to supply the fuel across the Atlantic while Russia is close to the European market and has obvious advantages in terms of transportation cost.

The US LNG exports to Europe had been only marginally profitable, but the Ukraine crisis has made the business lucrative. The cost of US LNG to Europe is $5-8/MMBtu, and the Dutch TTF natural gas price was below this range for most of the past three years.

Before April 2021, the LNG trade between the US and Europe yielded meager profits for Washington. But after the Ukraine crisis broke out in March last year, the price of natural gas in Europe increased — in fact, it increased by 10 times from the beginning to the end 2021. LNG exports to Europe offers huge profit margins to the US, and it is estimated that in the second and third quarters of 2021 alone, the US' net profit from LNG trade with Europe exceeded $2 billion.

However, access to the European natural gas market is not the main reason why the US has triggered the Russia-Ukraine confrontation. But by doing so the US can pave the way for its huge investments in political, economic and military resources in eastern Ukraine.

No wonder the US Congress approved $200 million in new defense aid to Ukraine in December last year, and the US embassy in Kiev confirmed that parts of the aid arrived in the country on Jan 22. This is not only a sure bet compared with increasing LNG exports to Europe, but will also meet the US' long-term strategic interests and short-term economic interests.

The author is chief economist of Sealand Securities.

The views don't necessarily reflect those of China Daily. 

If you have a specific expertise, or would like to share your thought about our stories, then send us your writings at opinion@chinadaily.com.cn, and comment@chinadaily.com.cn.

MOSCOW - Russia closed its airspace to civilian aircraft on Thursday on its western borders with Ukraine and Belarus, the Russian aviation authorities announced, shortly after President Vladimir Putin authorized a "special military operation" in the Donbass region.

"Our plans do not include the occupation of Ukrainian territories. We are not going to impose anything on anyone by force," said Putin.

According to the Russian Defense Ministry, Russian Armed Forces are destroying "military infrastructure, air defense facilities, military airfields, aviation of the Ukrainian Armed Forces" with high-precision weapons, not targeting Ukrainian cities.

KYIV - A series of explosions hit Ukraine's largest airport Boryspil and several military objects in eastern and southern Ukraine early Thursday, according to Interfax-Ukraine news agency.

The Ukrainian Infrastructure Ministry said it was evacuating passengers and staff from Boryspil.

Media reports said there were also attacks in Kharkiv city in eastern Ukraine near the Russian border, in Kramatorsk town in the frontline in eastern Ukraine, in Vasylkiv city near Kyiv, in Dnipro city in central Ukraine as well as in the southern port city of Odesa.

MOSCOW/KYIV - Russian President Vladimir Putin on Thursday authorized "a special military operation" in the Donbass region, and Ukraine confirmed that military targets across the country were under attack.

"Our plans do not include the occupation of Ukrainian territories. We are not going to impose anything on anyone by force," Putin said in a televised speech to the nation, noting that Russia's move is in response to "fundamental threats" of the North Atlantic Treaty Organization (NATO) which has expanded to eastern Europe and brought its military infrastructure closer to Russian borders.

Putin called on all people living on the territory of Ukraine to "independently determine the future of their own and children".

In the Ukrainian capital of Kiev, explosions were heard at Boryspil International Airport and other places across the city, according to local media reports. The country's airspace was closed for civilian aircraft, and local authorities were evacuating passengers and staff from the airport.

Ukrainian President Volodymyr Zelensky on Thursday declared martial law in the country following Russia's military operation.

In a video address, Zelensky said his country is under attack. According to the Interior Ministry, military depots and airfields in the capital were hit by missiles.

Putin on Monday signed two decrees recognizing "the Lugansk People's Republic" and "the Donetsk People's Republic" as independent and sovereign states and deployed "peacekeeping" forces in the two regions.

Seeing it as "a matter of time" for NATO to expand eastward, Putin took military actions against Ukraine after his recent negotiations with the United States and NATO failed.

Russia will not allow Ukraine to have nuclear weapons, he said Thursday, adding that Russia took action to protect itself from "those who take Ukraine hostage".

In case of external interference in the situation in Ukraine, Russia will respond immediately, Putin said.

In a late-night address Wednesday, Zelensky said he had unsuccessfully sought talks with Putin. "I initiated a telephone call with the president of the Russian Federation. Result: silence."

While mobilizing troops, Russia closed its airspace to civilian aircraft on its western borders with Ukraine and Belarus, the aviation authorities said Thursday.

According to the Russian Defense Ministry, the Russian Armed Forces are destroying "military infrastructure, air defense facilities, military airfields, aviation of the Ukrainian Armed Forces" with high-precision weapons, not targeting Ukrainian cities.

Besides Kiev, several military targets in eastern and southern Ukraine were under attack early Thursday, according to the Interfax-Ukraine news agency.

Shortly after Putin announced the military operation in Ukraine, United Nations Secretary-General Antonio Guterres on Wednesday night called on Russia to withdraw its troops.

If the military action would lead to a generalized war, "it is difficult to forecast how dramatic it will be in the number of people who will die, in the number of people who will be displaced, in the number of people who will lose hope in relation to the future," Guterres told reporters following a Security Council emergency meeting on Ukraine.

To rally support of the West, Zelensky has reached out to US President Joe Biden and French President Emmanuel Macron over phone.

During the call, Biden briefed his Ukrainian counterpart on the steps Washington is taking "to rally international condemnation," adding that the United States "will continue to provide support and assistance to Ukraine and the Ukrainian people", according to a White House statement.

Biden also said he will meet with other leaders of the Group of Seven countries on Thursday.

The United States has announced what it called "the first tranche" of punitive measures on Russia -- sanctions on two major Russian banks and on the country's sovereign debt, preventing Moscow from raising money from the West and trading new debt in US or European markets. It also sanctioned Russian elites and their family members.

UNITED NATIONS - The United Nations and partners are attempting to meet the needs of people on both sides of the contact line in Ukraine despite volatile hostilities and limited funds, a UN spokesman said on Wednesday.

"Our colleagues in (Ukraine) continue to receive reports of hostilities impacting civilians and their properties, as well as infrastructure on both sides of the 'contact line,'" said Stephane Dujarric, the chief spokesman for UN Secretary-General Antonio Guterres. "Once again, we call on all parties to take all measures to protect civilians and civilian infrastructure."

He told reporters in a regular briefing, "despite the volatile security situation the United Nations and its humanitarian partners in eastern Ukraine are making all efforts to respond to the needs of people on both sides of that line."

Guterres earlier said in a speech at a General Assembly session on Ukraine how the global body works in the field during such hostilities. "Our humanitarian operations are independent of whoever might control the territory where people are living."

He said that since the start of the year, the world organization and its partners delivered 140 metric tons of life-saving aid across the contact line.

"Here again, our actions are based entirely on humanitarian principles endorsed by the General Assembly," the UN chief said. "United Nations humanitarian assistance is guided by four humanitarian principles: humanity, neutrality, impartiality, and independence."

Guterres added that the principles are central to establishing and maintaining access to affected people, including those in the context of an armed conflict.

Dujarric said the existing Humanitarian Response Plan for 2022 has been funded by less than 10 percent.

"We are calling on donors to prioritize their support to this plan, which seeks 190 million US dollars to address the needs of 1.8 million of the most vulnerable people on both sides of the 'contact line,'" the spokesman said, adding that limited funding limits response efforts on both sides.

The contact line separates the breakaway states in the easternmost Donbass region from the rest of Ukraine.

China's position on safeguarding the sovereignty and territorial integrity of all states "has been consistent", China's ambassador to the United Nations said on Wednesday, as he called for upholding the purposes and principles of the UN Charter, and urged a diplomatic solution to resolve the Ukraine issue.

"China has been paying attention to the evolving situation in Ukraine," Zhang Jun, China's permanent representative to the UN, said at the plenary meeting of the 76th session of the UN General Assembly on Ukraine. "The purposes and principles of the UN Charter should be jointly upheld.

"At the same time, we note that the issue of Ukraine is rooted in a complex web of historical and present factors. An interplay of those factors has driven the situation to this point," said Zhang. "In the current context, all parties concerned should exercise restraint and avoid taking any action that may aggravate tensions."

The envoy said China calls on all parties to recognize the importance of implementing the principle of indivisible security; to continue to engage in dialogue and consultation; and to seek reasonable solutions that address each other's concerns through peaceful means on the basis of equality and mutual respect.

"We welcome and encourage all efforts aimed at facilitating a diplomatic solution," he said.

Ukraine declared a state of emergency on Wednesday and told millions of its citizens living in Russia to return home amid the ongoing tensions with Russia.

The emergency measure will start on Feb 24 and would last for 30 days and can be extended for an extra 30 days. The measures will be in force nationwide, aside from the two breakaway regions.

The state of emergency would allow authorities to adopt heightened security measures, including imposing curfews if deemed necessary. It also includes personal document checks, blocks military reservists from leaving the country, bans mass gatherings and places restrictions on radio communication systems.

Russian leader's offer for more dialogue on Ukraine comes amid fresh sanctions

Russian President Vladimir Putin called for a direct and honest dialogue with the West over the Ukraine crisis on Tuesday amid the latest rounds of sanctions announced by the United States and Europe.

"Our country is always open for direct and honest dialogue, for the search for diplomatic solutions to the most complex problems," Putin said in a video address to mark the Defender of the Fatherland Day, a national holiday to celebrate the contributions of current and former personnel in the Russian Armed Forces.

In his speech, Putin congratulated the country's service personnel, saying he was certain of the "professionalism" of the Russian military in standing up for Russia's national interests.

He praised the battle-readiness of the Russian army and said the country would continue to develop state-of-the-art weapons.

"The interests of Russia, the security of our citizens, are nonnegotiable for us," he said.

"We will continue to develop advanced weapon systems, including hypersonic and those based on new physical principles, and expand the use of advanced digital technologies and elements of artificial intelligence."

Putin spoke after parliament's upper house, the Federation Council, on Tuesday gave him unanimous approval to deploy "peacekeepers" to two Ukrainian regions－"the Lugansk People's Republic" and "the Donetsk People's Republic"－now recognized by Moscow as independent and sovereign states.

Some 153 Russian senators backed the decision, Russian media reported.

On Wednesday, Russia started evacuating its diplomatic staff from all of its diplomatic facilities in Ukraine, the TASS news agency reported, citing a representative of Russia's embassy in Kyiv.

One day earlier, Russian Deputy Defense Minister Nikolay Pankov said: "Negotiations have stalled. The Ukrainian leadership has taken the path of violence and bloodshed." He was speaking during a session of the Federation Council called at Putin's request.

Preventing aggression

Also on Tuesday, the Russian Foreign Ministry said it had established diplomatic relations with the two regions.

The moves from Russia triggered the latest round of sanctions by the West.

US President Joe Biden on Tuesday announced tough sanctions in response to Russia's "beginning" an invasion of Ukraine, but said there was still time to avoid war.

Biden announced what he called the "first tranche" of sanctions, including steps to starve Russia of financing and target financial institutions and the country's "elites".

The European Union's foreign policy chief, Josep Borrell, said the bloc's members agreed on a package of new sanctions against Russia targeting the members of parliament that backed recognition of the two Ukrainian regions as independent states.

The EU sanctions will blacklist more Russian politicians, lawmakers and officials, ban EU investors from trading in Russian state bonds, and target imports and exports with some entities. However, EU foreign ministers chose not to sanction Putin, Borrell said.

Japan, Australia and Canada followed suit early on Wednesday with their own stringent penalties for Moscow and individuals.

Russia's foreign ministry on Wednesday said it would respond strongly to the new US sanctions in a way that would be sensitive and weighted toward Washington.

Agencies contributed to this story.

The Ukraine crisis is showing little sign of being resolved. The United States and the European Union have imposed a new tranche of sanctions on Russia, especially in financial field, aimed at increasing Russia's financing costs and weakening its economy.

Russia started "de-dollarizing" its economy years ago, to minimize the impact of the financial sanctions the United States and the European Union had been threatening to impose on the country. Unhappy with the US dollar's domination of the global economy despite the declining US economy, Russia has implemented de-dollarization policies to safeguard its monetary sovereignty, offset the impact of the financial sanctions by the US and the EU, and make the international financial order more dynamic.

Global debates on the possible collapse of the US dollar have been going on for nearly 50 years. In recent years, the debates have become increasingly fierce. Yet the dollar's hegemony continues, to a large extent.

How de-dollarization policies will play out

According to International Monetary Fund data, the share of the US dollar in global foreign exchange reserves was 59 percent in 1995, increasing to 59.02 percent in 2020. So it will be very difficult for Russia to end the dollar's domination of the global financial order. Besides, there is a huge gap in the economic strengths of Russia and the US, with the former's GDP being $1.71 trillion and the latter's nearly $23 trillion in 2021.

Given these facts, what are the prospects and significance of Russia's de-dollarization policy?

Russia and some other countries have introduced de-dollarization policies because the US uses the dollar as a weapon to impose sanctions on the countries, and the foremost anti-sanction measure is de-dollarization.

With the US imposing sanctions on other countries at the drop of a hat, in order to demand its pound of flesh, more and more countries are coming together to issue joint de-dollarization policies. Since about 10 percent of the countries and one quarter of the global population are suffering because of US sanctions, the de-dollarization trend is intensifying across the world.

After the 2008 global financial crisis, the US economy continued to hollow out, although the Federal Reserve kept resorting to quantitative easing. After the outbreak of the COVID-19 pandemic in 2020, the over-issuing of US dollars greatly increased in scale, leading to the dollar bond losing credit. This has resulted in the decline in the status and influence of the dollar in the global economic system, prompting Russia and some other countries to gradually clear the dollar bonds by increasing the share of the euro or other currencies in their foreign exchange reserves.

In the global currency competition, the dollar and the euro are generally balanced. The countermeasures against the "dollar trap" may lead to a multi-polar currency pattern. Just as the British pound gradually declined along with the British Empire, the dominant role of the dollar as the global currency too can be undermined sooner or later.

However, it is difficult for countries to take concerted de-dollarization measures since their interests differ. And the US uses the differences in interests to take them on one by one.

As such, the rivalry between the US, which is taking measures to maintain the dollar's hegemony, and countries such as Russia, which have launched de-dollarization policies, will create profound political and economic uncertainties. Also, Russia-US relations will become even more confrontational, especially in the fields of economy and finance, leading to more uncertainties in the international economic and financial order.

Yet the international payment system could undergo many changes. In the future, the international payment structure could be a combination of many options, including SWIFT(Society of Worldwide Interbank Financial Telecommunication) and the payment systems followed by the EU, China, Russia and other economies.

In fact, the interconnection between the payment systems of the EU, China and Russia could be the focus of economic and financial work of all countries to avoid the dollar hegemony in the future.

Dollar's hegemony lasts, but perhaps not forever

But Russia's ruble cannot replace the US dollar as an international currency in the near future. It is realistic to believe that Russia would take the lead in the construction of a new global financial order. Russia still lags behind the US and developed European countries when it comes to efficient allocation of market resources, which is a reflection of their financial strength, capital market perception, size of economy, infrastructure and the abundance of financial products. So Russia still has a long way to go to catch up with the advanced Western economies.

The wide gap between Russia and those economies in these areas will be an important factor affecting Russia's de-dollarization policy.

However, gold and digital currency will be important tools in Russia's de-dollarization drive. Many countries regard gold as an important tool for "de-dollarization", and Russia and some other countries have hoarded huge amounts of gold to secure their economies.

Also, digital currency, as a product of blockchain and digital technology, is a distinct virtual product of the digital age and sets the direction for future development. And the digital currencies issued by central banks will contribute to the de-dollarization drive.

Russia has made some key achievements in the field of digital currency, with the Russian digital financial assets law coming into effect in 2021 and Moscow carrying out the legislative work on the "digital ruble" in the second half of 2021. These developments will help Russia gain some advantages in digital currency and further promote its de-dollarization drive.

The significance of Russia's de-dollarization drive is that it is the most radical of de-dollarization measures taken by countries using other currencies. Russia has not only implemented de-dollarization measures domestically, but is also taking some tough measures in financial information exchange and international energy settlement currency. Because of Russia's resolute de-dollarizing measures and its vigorous efforts to deepen international cooperation, more and more countries are following in its footsteps to de-dollarize their economies or assisting it in its de-dollarization drive.

Therefore, we can say Russia's de-dollarization drive has had a global impact.

That some countries want to de-dollarize their economies shows the dissatisfaction with the US dollar's hegemony in the global financial and payment systems, concerns over the over-issuance of the dollar, the call for changing the dollar-based Bretton Woods system, and the need to change the current international economic and financial orders, so as to make them fairer and more balanced.

Although the de-dollarization drive cannot end the dollar's influence on the Russian economy in a short time, Russia has shown the world that the dollar's hegemony can be challenged and perhaps weakened in the long run.

The views don't necessarily reflect those of China Daily.

The author is deputy secretary general of the One Belt One Road Center at the Chinese Academy of Social Sciences.

If you have a specific expertise, or would like to share your thought about our stories, then send us your writings at opinion@chinadaily.com.cn, and comment@chinadaily.com.cn.

Door to issue's peaceful resolution has not fully closed, spokeswoman says

China accused the United States on Wednesday of fueling tensions and creating panic on the Ukraine issue, and urged all parties concerned to be responsible and work for peace.

"It is irresponsible to add fuel to the flames on the one hand while blaming those who fight the fire on the other hand," Foreign Ministry spokeswoman Hua Chunying said at a daily news briefing.

Unlike the US, which keeps sending weapons to Ukraine, China believes the door to a peaceful resolution of the Ukraine issue has not fully closed, and it will continue to promote peace talks in its own way, Hua said.

"We welcome and encourage all efforts that are committed to diplomatic resolution," she said.

The spokeswoman said that those who accused China of contradicting its stance on respecting national sovereignty and territorial integrity were "either driven by ulterior motives or deliberately distorting or misinterpreting China".

"The Ukraine issue has its complex historical background, and its involvement until now is the result of the interplay among different and complex factors," Hua said.

It is important to understand the whole story behind the Ukraine issue in order to find a rational and peaceful resolution and appropriately solve related parties' reasonable security concerns on the basis of equality and mutual respect, she said.

"When the US, in violation of its agreement with Russia, expanded the North Atlantic Treaty Organization eastward five times to the doorstep of Russia and deployed a large amount of offensive military weapons, have they ever considered the consequences of cornering a major power to a desperate situation?" she asked.

The principle of indivisible security, which broadly states that the security of any state is inseparable from others in its region, has been written into several documents that Russia has signed with the US, including the Helsinki Final Act.

But the US obviously didn't abide by its commitments, Hua said, adding that the US has not responded to Russia's security guarantee proposals.

"China believes that no country or bloc should seek the so-called maximization of their security interests, as security should be common, cooperative and sustainable, and Russia's security concerns should be valued and resolved," she said.

On Tuesday, the US and its European allies announced an array of sanctions against Russia, with measures included blacklisting two major banks and halting the Nord Stream 2 natural gas pipeline.

Hua said that China never thinks sanctions are the best way to solve problems and opposes any illegal unilateral sanction.

Statistics from the US Treasury Department showed that the previous US administration issued about 3,800 new sanctions. Since 2011, the US has imposed more than 100 sanctions on Russia.

"But did the US sanctions solve any problem? Does the world become better because of the US sanctions? Will the Ukraine issue be naturally resolved thanks to US sanctions? Will European security be better guaranteed with the US sanctions against Russia?" Hua asked.

Noting that the illegal unilateral sanctions issued by the US already caused severe difficulties to relevant countries' economies and livelihood, Hua said that the US should not undermine the legitimate rights and interests of China and other parties when dealing with the Ukraine issue and US relations with Russia.

Ruan Zongze, executive vice-president of the China Institute of International Studies, said that the US is provoking tensions and adding risks to the Ukraine issue by providing offensive weapons such as antitank missiles to Ukraine.

"The US is not de-escalating the situation as it said. As long as the Ukraine crisis continues, the US can keep high pressure on Russia while maintaining control of its European allies through NATO," Ruan said.

KYIV - The Ukrainian Parliament on Wednesday supported a bill to introduce a state of emergency in the country starting Feb 24 amid the ongoing tensions with Russia, according to the parliament's press service.

The legislation, introducing the state of emergency in all Ukrainian regions except for the conflict-hit Lugansk and Donetsk regions, for 30 days, was supported by 335 lawmakers in the 450-seat parliament.

In the Donetsk and Lugansk regions, where a Joint Forces Operation is underway, a special legal regime has been already in effect.

According to Interfax-Ukraine news agency, the state of emergency in 22 Ukrainian regions envisages a ban on holding mass meetings and protests, on changing the place of residence by those liable for military service, and on the production of information materials that can destabilize the situation in the country.

The new law also stipulates for restriction of freedom of movement, inspections of vehicles, premises and personal belongings of citizens, and the introduction of a curfew if the need arises.

Besides, it provides for the evacuation of residents from places where there is a danger to the lives of people.

Ukraine's National Security and Defense Council proposed the parliament introduce a state of emergency across the country due to the buildup of Russian troops near the Ukrainian border.

Earlier in the day, the State Border Guard Service (SBGS) of Ukraine imposed special measures in regions bordering Russia, Belarus and those having access to the seas.

The measures include the limitation of movement of private vehicles and floating devices, flights of light planes and unmanned aerial vehicles, as well as restrictions on filming and photographing of certain objects.

Since November, Kyiv and some Western countries have accused Russia of assembling heavy troops near the Ukrainian border, including in Belarus, with a possible intention of "invasion."

Denying any intention to attack any country, Russia said it has the right to mobilize troops within its borders to defend its territory, as the North Atlantic Treaty Organization's increasing military activities near Russia's borders constitute a threat to Russia's border security.

Reuters

WASHINGTON - US President Joe Biden on Tuesday announced "the first tranche" of sanctions against Russia after Moscow deployed troops in the Lugansk and Donetsk regions.

Russian President Vladimir Putin on Monday signed two decrees, recognizing "the Lugansk People's Republic" and "the Donetsk People's Republic" as "independent and sovereign" states, and later ordered troops to enter the regions to conduct peacekeeping operations.

Lugansk and Donetsk declared independence following a vote during the height of armed conflict with Kiev in 2014. Ukraine refused to recognize their self-proclaimed status.

Calling Russia's move "the beginning of a Russian invasion of Ukraine," Biden said in remarks delivered from the White House that his administration will impose sanctions on two Russian financial institutions - the VEB and the country's military bank -- as well as on Russia's sovereign debt and three individuals.

He explained that the measure "means we've cut off Russia's government from Western financing. It can no longer raise money from the West and cannot trade in its new debt on our markets or European markets either."

Biden also mentioned the suspension of the Nord Stream 2 natural gas pipeline project between Russia and Germany, which Berlin announced earlier in the day. Additional sanctions will be followed if the situation escalates, he said.

The president also announced movements of US troops to the three Baltic states of Estonia, Latvia and Lithuania, all of which are members of the North Atlantic Treaty Organization (NATO) and share borders with Russia.

Biden said that the United States has "no intention of fighting Russia" but will "abide by" its commitments to NATO.

Following Moscow's recognition of Lugansk and Donetsk, Biden signed an executive order on Monday banning Americans from doing businesses in the two regions.

On Tuesday, US Secretary of State Antony Blinken called off a meeting with Russian Foreign Minister Sergey Lavrov scheduled for Thursday.

During a joint press briefing at the State Department with Ukrainian Foreign Minister Dmytro Kuleba, Blinken said it makes little sense to hold a meeting with Lavrov following the Russian moves.

MOSCOW -- The Russian Federation Council, or the upper house of parliament, on Tuesday approved Russian President Vladimir Putin's request for the use of military abroad.

"Senators unanimously supported the adoption of the relevant Resolution," said a statement published on the website of the Federation Council.

Putin on Tuesday submitted a proposal that the Federation Council approve a resolution authorizing the use of the Armed Forces of the Russian Federation abroad on the basis of the generally accepted principles and norms of international law, according to the Kremlin.

Earlier in the day, Russia's State Duma, the lower house of parliament, ratified the treaties on friendship, cooperation and mutual assistance with "the Lugansk People's Republic (LPR)" and "the Donetsk People's Republic (DPR)" during a plenary session.

Putin inked the treaties on Monday, together with the heads of the LPR and DPR. The president also signed two decrees recognizing the LPR and the DPR as independent and sovereign states on Monday.

Ukrainian President Volodymyr Zelensky said early Tuesday that Kiev has been urging the international community to hold emergency talks over Russia's decision on the status of Donetsk and Lugansk regions in eastern Ukraine.

Talks at all levels welcomed, says Moscow as Kyiv mulls cutting ties

The Kremlin said on Tuesday it remained open to all diplomatic contacts over Ukraine and that any action by Kyiv to cut ties with Moscow would worsen an already tense situation.

"The Russian side remains open at all levels for diplomatic contacts… Everything depends on our opponents," Reuters quoted Kremlin spokesman Dmitry Peskov as saying, adding that any move by Kyiv to cut its official ties with Moscow would be "an extremely undesirable scenario that would make everything even more difficult".

Ukrainian leader Volodymyr Zelensky on Tuesday demanded an immediate halt to the Nord Stream 2 gas pipeline and Kyiv considered severing relations with Moscow in response to its recognition of two regions.

Russian President Vladimir Putin on Monday ordered the military to act as peacekeepers in "the Lugansk People's Republic (LPR)"and "the Donetsk People's Republic (DPR)" in eastern Ukraine, just hours after he recognized the regions as independent.

In two official decrees, Putin instructed the defense ministry to assume "the function of peacekeeping" in the Donetsk and Lugansk regions.

The Russian leader also demanded that Ukraine end military operations against militia in the two regions, or face more possible bloodshed.

"Otherwise, all responsibility for the possible continuation of bloodshed will be fully on the conscience of the regime in power in Ukraine."

After Putin's decision, Russia's ambassador to the United Nations Vassily Nebenzia said on Monday that eastern Ukraine had been on the brink of a new "Ukrainian military adventure" that Russia could not allow.

He also warned Western powers to "think twice" and not worsen the situation in Ukraine. He was speaking at an emergency meeting of the Security Council.

The United States on Monday announced financial sanctions against Russia for its decision and warned more were ready if necessary. US President Joe Biden will issue more orders on this issue, White House press secretary Jen Psaki said.

In an interview with Russian state news agency TASS, French expert Dmitry de Koshko said the US sanctions against Russia will cause the most pain in Europe.

Energy sector

De Koshko said that if the US imposes more sanctions on Russia, especially in the energy sector with any action against the Nord Stream 2 project, Europe "will eventually have to pay more for energy".

According to the expert, US sanctions "may complicate the operations of European business".

Mikhail Pogrebinsky, director of the Kyiv Center for Political Studies and Conflictology, a think tank in the Ukrainian capital, said Europe's ignorance of the regional situation and refusal to publicly criticize Kyiv has led to Russia's decision.

Georgy Chizhov, who heads the European Dialogue expert group, agrees. He said a slow escalation of the crisis that would last for a long time appears to be the conditionally likely scenario.

So far, no one is giving in, said Ivan Timofeev, the director of programs at the Russian International Affairs Council.

French President Emmanuel Macron on Monday condemned the Kremlin's move to recognize the DPR and the LPR, urging the European Union to agree to new sanctions against Moscow.

German Chancellor Olaf Scholz said on Tuesday that Germany has taken steps to halt the process of certifying the Nord Stream 2 gas pipeline from Russia.

The EU said on Tuesday that it wants to target banks financing Russian operations in the Donetsk and Lugansk regions, and hit Moscow's access to European financial markets. The proposals were expected to be formally submitted later on Tuesday.

Xinhua and Agencies contributed to this story.

BEIJING - Chinese Foreign Ministry on Tuesday called on all parties on the Ukraine issue to remain calm, ease tensions and resolve differences through dialogue and negotiation.

Foreign Ministry spokesperson Wang Wenbin made the remarks at a daily press briefing.

Chinese State Councilor and Foreign Minister Wang Yi had a telephone conversation with US Secretary of State Antony Blinken earlier in the day, expounding China's stance on the Ukraine crisis.

"China is concerned about the evolving situation in Ukraine, and China's position on the Ukraine issue is consistent," the spokesperson quoted the foreign minister as saying, noting that the legitimate security concerns of any country should be respected, and the purposes and principles of the UN Charter should be upheld.

He said the current situation in the Ukraine crisis is closely related to the delay in the effective implementation of the new Minsk agreement, and China will continue to make contacts with all relevant parties according to the merits of the matter itself.

China once again calls on all parties to exercise restraint, realize the importance of implementing the "indivisibility of security" principle, ease tensions and resolve differences through dialogue and negotiation as the situation in Ukraine is getting worse, the spokesperson said.

China's ambassador to the United Nations on Monday called for a diplomatic solution and peaceful means to solve international disputes.

"China has been paying close attention to the latest development of the situation in Ukraine," Zhang Jun, China's permanent representative to the UN, said at a Security Council meeting on Ukraine. "At present, all parties concerned must exercise restraint, and avoid any action that may fuel tensions."

"We welcome and encourage every effort for a diplomatic solution, and call on all parties concerned to continue dialogue and consultation, and seek reasonable solutions to address each other's concerns on the basis of equality and mutual respect," Zhang said.

Zhang said the current situation in Ukraine is a result of many complex factors. "China always makes its own position according to the merits of the matter itself. We believe that all countries should solve international disputes by peaceful means in line with the purposes and principles of the UN Charter," he said.

Russian President Vladimir Putin on Monday signed two decrees recognizing the "Lugansk People's Republic" and the "Donetsk People's Republic" as independent and sovereign states. He later instructed Russian armed forces to ensure peace in the two areas.

KYIV - Ukrainian President Volodymyr Zelensky said early Tuesday that Kyiv has been urging the international community to hold emergency talks over Russia's decision on the status of Donetsk and Lugansk regions in eastern Ukraine.

Ukraine has been calling for an emergency summit of the Normandy Format, a meeting of the United Nations Security Council, and a special meeting of the Organization for Security and Cooperation in Europe to address the issue, Zelensky said in a video address to the nation published on Facebook.

"The latest actions of the Russian Federation are a violation of the sovereignty and territorial integrity of our state. Russia is solely responsible for the consequences of such decisions," Zelensky said.

That Moscow recognized Luhansk and Donetsk regions as independent entities reflected "Russia's unilateral withdrawal from the Minsk agreements and ignoring the decisions of the Normandy Four," Zelensky said.

Emphasizing that kyiv is committed to a peaceful and diplomatic solution to the ongoing crisis, Zelensky said, "we will not give anything to anyone, and we are sure of that."

Russian President Vladimir Putin on Monday signed two decrees recognizing "the Lugansk People's Republic (LPR)" and "the Donetsk People's Republic (DPR)" as independent and sovereign states.

At a ceremony held in the Kremlin, Putin also inked the Treaty of Friendship, Cooperation and Mutual Assistance between Russia and the LPR and the DPR respectively with the heads of the two "republics", a Kremlin statement said.

"I consider it necessary to make a long overdue decision -- to immediately recognize the independence and sovereignty of the DPR and the LPR," Putin said in a televised address to the nation.

"Russia has done everything to preserve the territorial integrity of Ukraine" by fighting for the implementation of 2015 Minsk agreements, but all the efforts ended up in vain, he told the public.

According to Putin, nearly everyday there is Ukrainian shelling of settlements in Donbass and "there is no end in sight".

The crisis of European security occurred due to the eastward expansion of the North Atlantic Treaty Organization (NATO), which has led to the loss of mutual trust with Russia, Putin stressed.

He called it just "a matter of time" for NATO to accept Ukraine as a member state and then build facilities on its territory so that the level of military threats to Russia will rise dramatically.

As Moscow asked the United States and NATO for security guarantees, the Western countries precisely ignored Russia's fundamental concerns and nothing has changed in their position, Putin noted.

The Normandy Format, established in 2014, is a diplomatic group of senior representatives from Ukraine, Germany, Russia and France formed to resolve the conflict in eastern Ukraine.

The Minsk agreements, reached in September 2014 and February 2015, outline the steps needed to end the conflict between the Ukrainian government troops and local armed groups in Donbass.

UNITED NATIONS - United Nations Secretary-General Antonio Guterres on Monday expressed his deep concern over Russia's decision on the status of Donetsk and Lugansk of Ukraine.

The secretary-general is "greatly concerned" by the decision by the Russian Federation related to the status of certain areas of Donetsk and Lugansk regions of Ukraine, said Stephane Dujarric, spokesperson for the UN chief.

Through a statement attributable to Dujarric, the UN chief called for "peaceful settlement" of the conflict in eastern Ukraine, in accordance with the Minsk Agreements, as endorsed by the Security Council in resolution 2202 (2015).

"The secretary-general considers the decision of the Russian Federation to be a violation of the territorial integrity and sovereignty of Ukraine and inconsistent with the principles of the Charter of the United Nations," said the statement.

The United Nations, in line with the relevant General Assembly resolutions, remains "fully supportive of" the sovereignty, independence and territorial integrity of Ukraine, within its internationally recognized borders, according to the statement.

"The secretary-general urges all relevant actors to focus their efforts on ensuring an immediate cessation of hostilities, protection of civilians and civilian infrastructure, preventing any actions and statements that may further escalate the dangerous situation in and around Ukraine and prioritizing diplomacy to address all issues peacefully," it added.

At the day's press briefing, Dujarric said, "The secretary-general is greatly concerned with the latest reports of increased ceasefire violations, including the use of heavy weapons across the contact line in eastern Ukraine."

"We are particularly concerned regarding reports of civilian casualties, targeting of critical civilian infrastructure and evacuations," Dujarric said.

"We underline our call for an immediate cessation of hostilities, maximum restraint and for all parties to avoid any actions and statements that would escalate tensions further. All issues must be addressed through diplomacy," the spokesperson added.

Russian President Vladimir Putin announced on Monday that he had signed a decree recognizing "the Lugansk People's Republic (LPR)" and "the Donetsk People's Republic (DPR)" as independent and sovereign states.

BRUSSELS - European Union leaders said Monday that the bloc will react with sanctions against those involved in Russia's recognition of eastern Ukraine's Lugansk and Donetsk regions as independent states.

In a press statement, European Council President Charles Michel and European Commission President Ursula von der Leyen said they condemn the decision by Russia to recognize the two regions as "independent entities".

"This step is a blatant violation of international law as well as of the Minsk agreements," said the statement. "The Union will react with sanctions against those involved in this illegal act."

The announcement came after Russian President Vladimir Putin signed a decree recognizing "Lugansk People's Republic (LPR)" & "Donetsk People's Republic (DPR)" as independent states on Monday night.

Last week, Russia's State Duma, the lower house of the country's parliament, gave the green light to a bill recognizing the Luhansk and Donetsk republics in east Ukraine's breakaway region of Donbass as independent and sovereign states.

Hours before the announcement of Russia's recognition of the two regions, the European Union's foreign policy chief Josep Borell had warned of sanctions on Russia should it recognize the regions in eastern Ukraine.

"Certainly, if there is annexation there will be sanctions, and if there is recognition I will put the sanctions on the table and the ministers will decide," Borell said during a press conference after a meeting of the bloc's foreign ministers in Brussels.

Diplomacy put into high gear as leaders press for more talks

Ukraine and Russia called on Sunday for intensified diplomatic efforts to avert an all-out war, but blamed each other for a sharp escalation in shelling on Ukraine's front line with militia in east Ukraine's breakaway region of Donbass.

After separate calls with France's President Emmanuel Macron, Russian President Vladimir Putin and his Ukrainian counterpart Volodymyr Zelensky pressed for more talks.

During a 105-minute discussion with Macron, Putin said the cause of the escalation "is provocations carried out by the Ukrainian security forces", according to a statement by the Kremlin.

Moscow has demanded that NATO permanently rule out Ukraine's bid for membership of the trans-Atlantic alliance and the withdrawal of Western forces that have been deployed in Eastern Europe since the end of the Cold War.

According to the Russian state media TASS news agency, Putin "once again stressed the necessity for the United States and NATO to take Russia's demands on ensuring security guarantees seriously and to respond to them in a concrete and substantive manner".

But he added that he and Macron "believe it is important to intensify efforts to find solutions through diplomatic means".

Macron's office also said the two had agreed on "the need to favor a diplomatic solution to the ongoing crisis and to do everything to achieve one", adding that both countries' foreign ministers would meet in the coming days.

For Ukraine's part, Zelensky called for an immediate cease-fire and the resumption of talks under the Trilateral Contact Group of Russia, Ukraine, and the Organization for Security and Cooperation in Europe.

"We stand for intensifying the peace process," he tweeted, adding that he had informed Macron about "new provocative shelling" on the front line between Ukrainian forces and militants from two self-proclaimed republics in the Donbass region.

High-stakes calls

Macron's office dubbed the calls "the last possible and necessary efforts to avoid a major conflict in Ukraine" amid Washington's warning that an invasion is imminent.

US Secretary of State Antony Blinken claimed that Russia remained "on the brink" of invading Ukraine, but promised that President Joe Biden was ready to talk to Putin and that Washington would seek a diplomatic solution until Russian "tanks are actually rolling".

Agence France-Presse reported that Putin and Biden have agreed to a summit proposed by France－but only if Moscow does not invade Ukraine, France and the US have said.

However, the Kremlin later warned that there are no concrete plans for a summit between the Russian and US leaders.

Putin's spokesman Dmitry Peskov said: "It's premature to talk about any specific plans for organizing any kind of summits", adding that no "concrete plans" had been put in place.

He also said Putin would imminently address an extraordinary session of Russia's Security Council.

The possible breakthrough came after the Belarus Defense Ministry said Putin and Belarusian leader Alexander Lukashenko had decided to "continue inspections", citing increased military activity on their shared borders and an alleged "escalation" in eastern Ukraine.

Moscow had previously said the 30,000 troops it has in Belarus were simply carrying out readiness drills with its ally, which were due to end on Sunday, allowing the Russians to head back to their bases.

The announcement by Belarus will be seen as a further tightening of the screws on Ukraine, already facing increased shelling from militia from the self-proclaimed republics and a force of what Western capitals say is more than 150,000 Russian personnel on its borders.

More than 21,000 refugees from the Donbass region have crossed the Russian border in the southern Rostov region over the past 24 hours, TASS reported on Monday.

Agencies contributed to this story.