Ukraine cuts finances to separatist regions in the east until ‘terrorists’ leave

Ukraine's prime minister said Wednesday that financial aid from the central government to the pro-Russian separatist eastern regions will be stopped until "terrorists clear out of there."

However, Prime Minister Arseniy Yatsenyuk told a cabinet meeting that Ukraine would maintain gas and electricity supplies so as to spare "ordinary people" during the winter.

The decision to axe the Donetsk and Lugansk regions from Ukraine's cash-strapped budget came amid growing doubts over the future of a two-month old peace accord that was meant to stop fighting and lead to political settlement.

Yatsenyuk said the separatist leaders, who have declared independence and defied the government by holding their own elections on Sunday, should be left to fend for themselves.

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"We don't want to finance imposters and conmen," he said. "As soon as the terrorists clear out of there and we get back the territory, then we will pay every person the welfare payments they have the right to."

"To pay today is to directly finance terrorism," he said. "The terrorists should get out of this territory and Russia should stop supporting them."

However, gas and power supplies will continue, he said. "Our citizens are on this territory and the government will not allow these people to freeze, because this would lead to humanitarian catastrophe."

NATO says Russian troops closer to Ukraine border

Meanwhile, Russia has moved troops closer to the border with Ukraine and continues to support rebels in the country's east, NATO's chief said on Tuesday, after an election held by the pro-Russian separatists and condemned by Kyiv and Western leaders.

Ukraine's president said Sunday's vote flouted terms of a plan to end a war that has killed more than 4,000 people, and that newly formed army units would be sent to defend a string of eastern cities against a possible new rebel offensive.

"Recently we are seeing Russian troops moving closer to the border with Ukraine," Jens Stoltenberg, secretary-general of NATO, told a news conference with EU foreign policy chief Federica Mogherini.

"Russia continues to support separatists by training them, by providing equipment and support them by also having Russian special forces inside eastern parts of Ukraine."

Russia has denied military involvement in eastern Ukraine despite what Western officials have cited as overwhelming evidence to the contrary.

"We call on Russia to make genuine efforts towards a peaceful solution," Stoltenberg said, "and to use all their influence on the separatists to make them respect the Minsk agreements and to respect the ceasefire which is a precondition for a political solution to the difficult situation in Ukraine."