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Ukraine mourns as gas talks run down to wire

KIEV, Ukraine -- Ukraine on Sunday mourned 49 people killed when pro-Kremlin rebels downed their military plane as Kiev prepared to host last-gasp talks with Moscow to avert a Russian gas cut that would also hit Europe.

Flags were lowered across the crisis-hit nation while television stations inserted an image of a burning candle into their frames after Ukrainian forces suffered the single biggest loss of life in their escalating two-month push to reclaim control of separatist areas of the industrial east.

But the gas negotiations and commemorations were both clouded by a new diplomatic feud that exploded after an irate Ukrainian mob in Kiev smashed the Russian embassy's windows and overturned cars while the police looked on.

Ukraine's new more nationalistic leaders and their Western allies accuse Russia of supplying weapons and even tanks to the insurgents in a bid to break up its western neighbor following the February ouster of a pro-Kremlin regime.

NATO released satellite images purporting to show three Russian tanks that had crossed the border and were later spotted being raced across the eastern city of Donetsk by militants flying the flag of their self-declared “People's Republic.”

But Moscow has hit back by accusing Western powers of backing dangerous Ukrainian “fascists” who are prosecuting the east's ethnic Russians and waging a “punitive operation” against their own people.

The third “gas war” between Russia and Ukraine since 2006 flared when Moscow nearly doubled its rates in the wake of the deadly winter uprising that now threatens to pull Kiev out of the Kremlin's historic orbit for the first time.

Ukraine receives half its gas supplies from Russia and transports 15 percent of the fuel consumed in Europe — a reality that prompted EU Energy Commissioner Guenther Oettinger to try to urgently broker a long-term solution to the dispute.

Final Offer

Kiev said heading into the negotiations that it was ready to make a US$1.95 billion (1.45 billion euro) payment demanded by Moscow if Russia agreed to cut its ongoing price to US$326 from US$485.50 for 1,000 cubic meters of gas.

But Russian President Vladimir Putin says US$385 per 1,000 cubic meters is his final offer and has threatened to turn off Ukraine's taps if no payment was made by 0600 GMT Monday.

The negotiations broke up after just two hours late Saturday without a hint of a comprise.

“No solution was found,” Ukrainian Energy Minister Yuriy Prodan told reporters outside the plush central Kiev hotel hosting the high-stakes meeting.

A spokeswoman for Ukraine's Naftogaz state energy company said Sunday's round should begin at 1600 GMT after sides failed to meet in the morning as originally planned.

'Hands off Ukraine'

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A Ukrainian firefighter pours foam onto smashed cars near the Russian Embassy during a rally in Kiev, Ukraine, Saturday, June 14. (AP)

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