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Ukraine rebels down army helicopter, killing 12 troops

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He suggested the team could have been involved in espionage.

A source at the organisation told AFP that the team — a Dane, an Estonian, a Turk and a Swiss national — included one woman and that negotiations for their release had been ongoing for some time.

The OSCE source added that the group appeared to have been at one stage held by Russian Cossacks who were helping the rebels in the eastern region of Lugansk.

A second group of 11 observers was detained in the neighbouring Donetsk province on Wednesday. The OSCE said it had managed to re-establish contact with them by the end of the night.

– Gas deadline –

Cash-strapped Ukraine has until midnight Thursday to pay Russia $2 billion under an EU-brokered agreement or face a halt in gas supplies next week that would also hit parts of Europe.

Russia and Ukraine launched their third gas war in less than a decade after Moscow decided to cancel its previous rebates and nearly double the price it charges Kiev for gas after the Kremlin backed president’s fall.

Ukraine refused to pay in protest and has since baulked at the terms of an interim deal negotiated with the help of a top EU energy official that would have seen Russia receive a down payment on Kiev’s debt by Thursday night.

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Russia’s state owned natural gas giant Gazprom said a failure to pay will scuttle negotiations on a lower gas price and prompt it to proceed with a cut-off that would hit parts of Europe next Tuesday unless a larger payment of more than $5 billion is made by Monday night.

Putin pointed out on Wednesday that Russia had not received any money for gas since November but was still willing to negotiate a lower price — if it was paid on time.

“This cannot continue forever,” Putin told a government meeting. “Everyone understands that perfectly well.”

About 15 percent of all gas consumed in Europe is pumped in from Russia through Ukraine and analysts said it was in both sides’ interest to find a compromise.

– Western security alliance –

Poroshenko said Thursday he no longer trusted Russia — accused by both Kiev and Western leaders of orchestrating the insurgency — and would seek a new defence alliance with Europe and the United States.

“We need a new defence alliance with the United States and Europe to protect Ukraine militarily,” he told Germany’s Bild daily.

The comments are likely to irritate Putin because he has insisted that Ukraine draft a new constitution that guarantees Kiev’s neutrality in international affairs.

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