Russia said the deaths of its servicemen in Crimea wouldnt go without repercussions and Ukrainian President Petro Poroshenko put his troops near the peninsula and in the countrys easternmost regions on high alert, warns that Vladimir Putin is seeking to reignite the conflict in the disputed territories.

The Foreign Ministry in Moscow ratcheted up the threat of retaliation a day after the Russian chairperson vowed to respond with very serious measures and said Ukrainian agents had engaged in terror tactics on the Black Sea peninsula, which he seized in 2014. Poroshenko rejected the accusations as fiction that could be an excuse for further military threats by Russia. He ordered the armed forces, national guard and border troops to go on high alert Thursday and recommended police to step up security to prevent potential terrorist attacks, according to a statement on his website.

The worst diplomatic stalemate between the two countries since a truce signed last year created alarm in foreign capitals and echoed across marketplaces. The showdown coincided with a surge in violence in Ukraines eastern territories, where government troops have been locked in a struggle against pro-Russian separatists, and torpedoed plans to revive four-way peace talks at the September G-2 0 session in China, with Putin reversing earlier support and calling the negotiations pointless.

There is a possibility escalation in eastern Ukraine and that is very dangerous, Alexei Makarkin, deputy head of the Moscow-based Center for Political Technologies, said by phone. The events are developing according to a fairly negative scenario. Neither side has any trust in the other.

Swaps, Yields

The cost of insuring Russian debt against default climbed the most in five weeks as tensions escalated. The yield on Ukraines dollar-denominated note maturing in 2019 rose 88 basis phases from a record low to 7.795 percent in Kiev on Thursday.

Putin discussed bolstering defenses on the peninsula with his Security Council, the Kremlin press service said on Thursday. A day earlier, he said the Federal Security Service reported Ukrainian intelligence officers killed two Russian servicemen during covert operations in Crimea.

For more on the conflict in Ukraine and its background, click here .~ ATAGEND

We again call on our partners to bear the greatest influence on the authorities concerned in Kiev to prevent them from taking dangerous steps that might have the most negative consequences, the Russian Foreign Ministry said in a statement. Playing with fire leads to no good.

Ukraines United Nation mission called for urgent Security Council consultations over Russias remarks. NATO said it was closely monitoring the heightened tensions, and both it and the U.S. said they had considered no proof corroborating Russias allegations.

Russia has not provided any tangible evidence for its accusations against Ukraine, the North Atlantic Treaty Organization said in an e-mailed statement in Brussels. We are also deeply concerned by the recent upsurge in violence in eastern Ukraine.

This is a very tense time, U.S. State Department spokeswoman Elizabeth Trudeau told reporters in Washington Thursday. Its is high time to take a step back, were calling on all sides to reduce.

Truce Dead?

Poroshenko ordered the Foreign Ministry to organize phone calls with Putin and U.S. Vice President Joe Biden. He also sought to speak with other leaders, including German Chancellor Angela Merkel, whose Foreign Ministry called the events in Crimea worrying. Russias top diplomat, Sergei Lavrov, spoke with his French counterpart on Thursday.

The Russian leader has exhibited a propensity to use instability in the region as leverage in negotiations. He also has launched military operations while the worlds attention is on the Olympic Games and many leaders are on vacation. The annexation of Crimea came just after Russia hosted the Sochi Olympics, and Russia sent troops into Georgia during the Beijing Olympics in 2008. This years Games have been marked by a partial prohibition on Russian athletes by doping authorities, which Putin said was unfair.

August is the best time for Moscows military action because Western decision makers are on holidays, Anders Aslund, a senior fellow at the Atlantic Council, wrote in a blog post. The Berlin Wall was initiated in August 1961, the invasion of Czechoslovakia occurred in August 1968, and the Moscow coup took place in August 1991.

Ukraine has accused its fellow former Soviet republic of funneling money, weapons and fighters to the separatists who have seized control of much of its easternmost Donetsk and Luhansk regions, a largely industrial area known as Donbas, in a conflict that the UN calculates has killed almost 10,000 people.

Western countries have refused to recognize Russias takeover of Crimea and have imposed sanctions that have helped force-out the worlds biggest energy-exporting economy into recession.

The reason why were in this situation in the first place is because of Russias illegal annexation of Crimea, said Peter Wilson, the U.K.s ambassador to the UN. What were find is a spike in tensions in Eastern Ukraine that hasnt been considered since last August. That is a matter for real concern.

Putins comment on the futility of farther talks tied to the cease-fire signed in Minsk, Belarus, in February 2015 — a long-term resolution calling for both sides to pull back weapons, for Ukraine to regain control of its border and to change its constitution, and for elections to take place in separatist-held regions — may suggest hes threatening, along with his separatist friends, to reignite the conflict.

It does not make sense to meet during the course of its G-2 0, Vladislav Deynego, representative of pro-Russian rebels in the self-proclaimed Luhansk Peoples Republic, said by phone. Events in Crimea are part of Ukraines attempt to escalate situation.

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