MINSK: The presidents of Russia and Ukraine on Tuesday sat down to crunch one-on-one talks over heavy fighting in east Ukraine as the Kremlin admitted for the first time its troops had entered its neighbour’s territory.

Ukrainian President Petro Poroshenko and Russian leader Vladimir Putin began a key bilateral meeting after six hours of difficult negotiations alongside top EU officials in Minsk aimed at defusing a crisis some fear could lead to all-out war between Kiev and Moscow. There had seemed little hope for a major breakthrough after the conflict appeared to escalate when Ukraine released footage hours ahead of the talks purporting to show 10 Russian soldiers it had captured on its territory.

A Moscow military source claimed the soldiers had crossed into Ukraine “by accident”. “In Minsk at this meeting the fate of the world and Europe is being decided,” Poroshenko said in Russian as the earlier roundtable meeting started with Putin alongside top EU representatives and the leaders of Kazakhstan and Belarus. Putin, however, barely mentioned the brutal fighting that has killed some 2,200 people in the east of Ukraine since April in remarks at the start of the group talks, focusing instead on the damage Kiev’s recent agreement with the EU could have on Russia’s economy.

On Tuesday it was announced that the Russian economy is nearing recession. At the same time it was also reported that the Ukrainian currency slid to a new record low against the dollar.

On the ground, battles raged in east Ukraine, an AFP journalist reported fierce shelling in a town close to the Russian border where Kiev accuses Moscow of trying to open up a “new front” into government-held territory.

Belarussian leader Alexander Lukashenko said ahead of the Putin-Prososhenko pow-wow that the Ukrainian leader had called for a “contact group” to meet in Minsk Wednesday to discuss ways to resolve the fighting in east Ukraine.

“It has been proposed to convene the group as soon as possible. Petro Poroshenko insists the meeting should be tomorrow,” Lukashenko told journalists, without specifying who would be in the group. Previously representatives of Ukraine, Russia and the Organisation for Security and Cooperation in Europe have met to negotiate the crisis.

Lukashenko also said Putin had called for economic difference between Russia and Ukraine to be ironed out before Kiev ratifies its agreement with the EU in September.—AFP