Ukraine: Armed Stand-Off At Crimea Military Post

Armed men attempted to seize a Ukrainian military post in Crimea, as Vladimir Putin said he hoped there would be no new Cold War.

It was not clear if Russian forces were involved in the attack in Sevastopol, during which no shots were fired.

However, more than 30,000 are now believed to be in Ukraine's disputed Crimea peninsula.

The estimate is nearly twice the previous figure given by Ukraine's new government in Kiev.

A spokesman for Serhiy Astakhov, head of the Ukrainian border guards, told Reuters the figure included both troops that had arrived over the last week and Russia's Black Sea Fleet, based in the Crimean port city of Sevastopol.

Russian forces outside a military base in Simferopol, Crimea

Around 20 pro-Russian militants stormed the missile defence airbase in two transporter trucks and entered into negotiations with the Ukrainian commander of the airbase, while soldiers guarding it locked themselves in their barracks.

Around 100 Ukrainian troops are understood to be stationed at the base, where the tense stand-off was eventually resolved.

The militants clambered back into their trucks and drove away from the scene.

Ukraine protester Oksana Prots outside Downing Street in London

Sky's Robert Nisbet, in Sevastopol, said: "A confrontation like this is worrying when tensions are so high. Any moment that involves a confrontation is a potential flashpoint."

Mr Putin's spokesman said despite the deep differences with the West over Ukraine, the Russian President hoped a common ground could be found and there would be no new Cold War.

"There still remains hope ... that some points of agreement can be found as a result of dialogue - which our partners, thank God, have not yet rejected," state-run RIA news agency quoted Dmitry Peskov as saying.

"I believe that it (a new Cold War) has not started and I would like to believe it will not start."

Russian President Vladimir Putin at the Paralymic Games in Sochi

The Kremlin feared ethnic cleansing if those behind the ousting of Ukrainian President Viktor Yanukovych in Kiev made their way to Crimea or eastern Ukraine, Mr Peskov said.

He added calls for talks between Russia and Ukraine with the West as a mediator "make us smile".

His comments came as Russian foreign minister Sergei Lavrov warned US Secretary of State John Kerry that sanctions would "hit the United States like a boomerang".

In a conversation with Mr Kerry over the phone, Mr Lavrov also warned the US against taking "hasty and reckless steps" that could harm Russian-American relations.

US President Barack Obama has ordered sanctions on those responsible for Moscow's military intervention in Ukraine, including bans on travel to America and freezing of their US assets - although a US official said Mr Putin was not on the list of those to be sanctioned.

Moscow's forces now have complete control of Crimea, but the only troops Russia claims it has there are the 11,000 in Sevastopol - a claim ridiculed by the West.

The soldiers that have occupied key positions across the region and surrounded Ukrainian troops in their bases wear no badges on their uniforms, but drive vehicles with Russian military number plates.

Defence analyst Francis Tusa told Sky News: "Most of them seem to be in the most recent-issued Russian camouflage uniforms.

"They all look well-trained - they just don't look like a ragtag militia that's grown up out of nowhere claiming to protect homes.

Pro-Russians gather outside a military base in Crimea

"The weapons look very well looked after. They may not be wearing unit badges, but they look like regular, well-trained forces.

"I think it's very difficult to deny the impression they give."

Mr Putin has denied he is "orchestrating events" in Crimea and said he is simply responding to a request for help.

He spoke out after Moscow was warned it faces further sanctions if it fails to pull its forces out of Ukraine, as the gravest post-Cold War stand-off between the West and Russia continues.

Former Kremlin spin doctor Gleb Pavlovsky said there was now a greater danger of shots being fired in Crimea.

Mykhaylo Tkachenko of Ukraine bears the flag at 2014 Sochi Paralympic Games

He said: "Russia is encouraging the action of local forces. We are at a very dangerous point, and it threatens to push a political crisis in the direction of a military situation."

In a statement released by the Kremlin early on Friday, Mr Putin said Kiev's new authorities had imposed "absolutely illegitimate decisions on the eastern, southeastern and Crimea regions".

"Russia cannot ignore calls for help in this matter and it acts accordingly, in full compliance with the international law," he said.

Meanwhile, Ukraine's Paralympic chief Valeriy Sushkevich said his 23-strong team would compete in the Winter Paralympics in the Russian Black Sea resort of Sochi - but would pull out of the Games if Russian forces invaded mainland Ukraine.

Only biathlete Mykhaylo Tkachenko, bearing the Ukraine national flag, took part in the opening ceremony

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Malaysia Airlines Plane 'Loses Contact'

Malaysia Airlines says flight MH370 carrying 239 people bound for Beijing "has lost contact" with air traffic control.

The state-owned carrier said the Boeing 777-200 disappeared this morning at 2.40am local time.

It left Kuala Lumpur just after midnight and was due to arrive in Beijing at 6.30am local time.

Malaysia Airlines said in a statement: "The flight is carrying a total number of 227 passengers (including two infants), 12 crew members.

"The passengers are of 13 different nationalities."

The carrier said it was working with the authorities who have activated their search and rescue teams to locate the aircraft.

It is also contacting the next-of-kin of the passengers and crew.

"Our thoughts and prayers are with all affected passengers and crew and their family members," Malaysia Airlines CEO Ahmad Jauhari Yahya said in a statement.

The airline said it would provide "regular updates" on the situation and has set up the phone line +603 7884 1234 for concerned members of the public.

A flight tracker image shows the path of the flight (the white line)

China's state news agency reported that the plane lost communication over Vietnam with air traffic control in the Ho Chi Minh area and that radar contact also was lost.

It said there had not been any reports received yet about any aircraft crashed in Chinese waters.

It also reported that around 160 of the passengers are Chinese nationals.

Chinese Foreign Minister Wang Yi said in a statement: "This news has made us all very worried.

"We hope every one of the passengers is safe. We are doing all we can to get more details."

Malaysia Airlines has 15 Boeing 777-200 jets in its fleet of about 100 planes.

If the plane is found to have crashed, the loss would mark the second fatal accident involving a Boeing 777 in less than a year, after an unblemished safety record since the jet entered service in 1995.

Last summer, an Asiana Airlines Boeing 777 crash landed in San Francisco, killing three passengers.

Boeing said it was aware of reports that the Malaysia Airlines plane has gone missing and was monitoring the situation, but had no further comment.

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Ukraine: UN Envoy Threatened By Armed Mob

Ukraine: Sanctions On Russia Would Be Effective

Updated: 8:31pm UK, Tuesday 04 March 2014

By Ed Conway, Economics Editor

There is an assumption out there - one reflected in the briefing document inadvertently flashed to photographers by an official outside Downing Street - that economic sanctions on Russia would not be worthwhile.

The rationale has two strands: first, that any bar on trade and finance with Russia would end up being worse for Britain than for Russia, and second, that Russia, with its experience of illicit financial flows would be able to circumvent the sanctions anyway.

Both of these arguments are bogus. There is reason to believe that sanctions on Russia would be more effective now than at any time in recent years.

In order to understand why, one must first of all examine the economic linkages between the UK and Russia.

This is no mean feat as much of the cash flow between the two countries is thought to be illicit, and therefore flies beneath the radar.

But with the use of one or two big numbers, one can, at the very least get an idea.

The first thing to remember here that when one talks about economic sanctions, there are two main elements: first, bars on trade and second, bars on financial flows.

The impact of the trade barriers are relatively predictable, because we have a far better idea of how many goods pass between our two countries.

According to the Pink Book, the definitive annual ONS survey of trade flows, Russia is a relatively important trade partner for Britain - the 12th biggest destination for UK goods exports and the 25th biggest destination for services exports.

It is the 14th biggest source of UK goods imports and the 29th biggest source of UK services imports, which puts it behind Cyprus and a touch ahead of Austria.

In other words, in trade terms, Russia is no minnow, but neither is it as essential a trade partner as the US, Germany or France.

The interesting bit comes when one considers the flow of cash between the two countries.

Let's focus first of all on Russian cash heading into the UK. Pinning down just how much there is tricky.

We know that a lot of money has escaped from Russia in the past few years. The central bank quoted a figure of $56bn (£33bn) of outflows in 2012 alone, two-thirds of which it believes may be illicit.

Parsing International Monetary Figures to try to get a sense of outflows, the total between 2005 and 2013 is a touch more conservative at about $103bn (£62bn).

Either way, these are big numbers, and reflect cash that has simply left the country for other shores.

There is no definitive measure of how much of this flow has come into the UK, but based on the country's international investment position - a measure of how many assets Russians hold in the UK (and vice versa) - the answer is likely to be, an awful lot.

According to the latest numbers, a quarter of the Russian banking sector's entire foreign assets are in the UK. The total ($27.6bn) is greater than is in any other country worldwide.

The flow in the other direction is equally important.

According to figures Sky News has analysed from the Russian central bank, Britain has, in recent years, become the biggest provider of loans to Russian businesses.

Now, to some extent, both this and the previous numbers are a reflection of the fact that London is the world's premier centre of finance; much of this cash will originate in other countries and simply flow through the UK.

Nonetheless, this underlines that Russia has been highly reliant on flows of money through the UK in recent years and remains so today.

In other words, were there to be financial sanctions on the country, they would have more impact if levied by the UK than by any other country in the world.

The flipside, of course, is that would also represent a significant financial blow for the City which, on the basis of these numbers, has become quite reliant on Russian business as well.

But the evidence above underlines that far from having little impact, a ban on financial links with Moscow would make an enormous difference.

This impression is reinforced when one recalls that Cyprus, which used to provide the bulk of finance to Russia, is much less likely to be able to given it is still yet to remove the capital controls it imposed during its euro crisis last year.

In other words, while there may well be alternative sources of finance for Russian businesses, they may not be big and liquid enough to replace the City of London.

Finally, it so happens that this is a moment of particular vulnerability for the Russian economy. The past couple of years have been tepid in terms of economic growth. The central bank's decision to raise interest rates by a full 1.5% this week comes at about the worst possible time.

The collapse in the stock market on Monday is a further signal of financial stress. Though there are perpetual fears that the country might turn off the gas pipelines into Europe, it's worth remembering that this is something the country has never fully gone ahead with - not during the previous Ukraine crises, not even during the dying days of the Cold War.

What's remarkable, actually, is how little Russia's gas production levels have changed over the past quarter of a century. And there's a good reason for this: it is deeply reliant on that gas revenue.

All of which makes President Vladimir Putin's actions in Ukraine even more of a gamble. The country is extremely sensitive to sanctions - both financial (primarily London) and trade (primarily those countries which consume lots of Russian gas, such as Germany, Ukraine and Turkey).

Beneath the bluster, Mr Putin will be hoping desperately that the G7 governments remain too wary to impose them at all.

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Ukraine: No Agreements Reached In Crisis Talks

Diplomatic efforts to find a solution to the Ukraine crisis have stalled and ended with "no agreements" being reached.

Russian Foreign Minister Sergei Lavrov met US Secretary of State John Kerry in Paris and left saying there would be further discussions on Ukraine "in days to come".

Mr Kerry urged Mr Lavrov to engage in direct talks with Ukraine as the pair met briefly before entering in further discussions with officials from France, Germany and British Foreign Secretary William Hague.

However, Mr Lavrov left the French foreign ministry without meeting Ukrainian foreign minister Andriy Deshchytsya.

The pair had earlier arrived at the building separately, which gave rise to hopes of them sitting down together to try and resolve the escalating crisis in Ukraine.

"We are all concerned at what is happening there," said Mr Lavrov.

"We agreed to continue those discussions in the days to come to see how best we can help stabilise, normalise the situation and overcome the crisis," he added.

Troops, believed to be Russian soldiers, march outside a Ukrainian base

Mr Kerry described the talks as "constructive" with "a number of ideas on the table" and said all parties were committed to finding a "remedy" to the crisis "through dialogue".

However, he warned: "We cannot and will not allow the integrity, the sovereignty of the country of Ukraine to be violated and for those violations to go unanswered.

"Russia made a choice and we have clearly stated that we believe it is the wrong choice - that is the choice to move troops into Crimea.

"Russia can now choose to de-escalate this situation and we are committed to working with Russia and together with our friends and allies in an effort to provide a way for this entire situation to find the road to de-escalation."

He said the US was committed to "making it happen as soon as possible" and said he expected to meet again with Mr Lavrov in Rome on Thursday.

Mr Kerry and Mr Lavrov held face-to-face talks

IMr Deshchytsya said: "We want to keep good dialogue, good relations with the Russian people.

"We want to settle this conflict peacefully. We don't want to fight with Russia."

Mr Hague sad afterwards: "What is at stake is so enormous that it is very important for us to continue our diplomatic efforts. So in different places, through different channels, sometimes face-to face, sometimes by telephone, this will be continued over the coming days."

Wednesday's talks came to an end as Nato announced a full review of its cooperation with Russia - and said it would suspend plans for a joint mission linked to the destruction of Syria's chemical weapons.

It has been in talks with Russia about staging a possible joint mission to protect a US ship that will destroy Syria's chemical weapons arsenal.

At the same time British Chancellor George Osborne announced on Twitter plans to freeze assets of 18 Ukrainians accused of embezzling Ukrainian state funds.

Mr Lavrov answers journalists' questions in Madrid

Last week Switzerland, Austria and Liechtenstein said they were taking similar steps, but it is unclear whether the action involves the same 18 people.

Earlier, speaking at a news briefing with his Spanish counterpart Jose Manuel Garcia-Margallo in Madrid, Mr Lavrov said it was important for Russia to continue talks with Nato and EU leaders.

Mr Lavrov also said Moscow would like to see a de-escalation in tensions, sparked by Russian intervention in Ukraine's Crimea region.

But he added that "nobody has the right to be angry with Russia".

In Russia, President Vladimir Putin received a telephone call from German Chancellor Angela Merkel, the Kremlin said.

The two leaders "discussed possible scenarios for international co-operation in the normalisation of the social and political situation," it said in a statement.

Troops in Belbek relax after a stand-off with the Russian military

Mr Putin told his cabinet he did not want the tensions to detract from economic co-operation with Moscow's "traditional partners".

However, British Prime Minister David Cameron warned there would be "costs and consequences" for Russia if it did nothing to ease the crisis in Ukraine.

He told Prime Minister's Questions the situation should not be a "tug of war" between Russia and the West.

Mr Cameron also had a telephone conversation with US President Barack Obama about the situation in Ukraine and tweeted: "We are united in condemnation of Russia's actions."

European Commission President Jose Manuel Barroso said the EU was ready to provide 11bn euros (£9.2bn) of financial support to Ukraine over the next couple of years.

David Cameron on the phone to Barack Obama

The EU also said it could vote on Russian sanctions on Thursday if there is no de-escalation in the stand-off before then.

Mr Putin has previously said any Western sanctions against Moscow would be counter-productive.

America has already threatened sanctions, with a senior US official saying Washington is ready to impose them in days rather than weeks.

Mr Obama has also spoken to Mrs Merkel about a plan to end the stalemate.

Under the proposal, Russia would pull back its forces in Crimea to their bases in the peninsula and limit troop numbers to a Ukraine-agreed maximum of 11,000.

People watch the latest news on a TV screen at Independence square, Kiev

However, Mr Lavrov said that pro-Russian armed groups operating in Crimea were "self-defence" forces who do not answer to Moscow.

He added that Russian naval personnel in the region were in their normal positions.

A senior American official has said the plan would also see international monitors allowed in to ensure the human rights of ethnic Russians are protected.

Seen as an effort to offer Mr Putin a way out of the crisis without losing face, the plan would pave the way for direct talks between Moscow and the new Ukraine government with the potential for some international mediation.

The proposal would also see planned elections in Ukraine this May go ahead.

The US official added that Mr Obama had made clear to Ms Merkel that he would not attend a G8 summit scheduled for June in Sochi, Russia, if the situation in Ukraine had not changed.

Preparatory meetings about the summit have already been suspended.

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Ukraine: Document Reveals UK Stance On Crisis

A document detailing the UK's position on the Ukraine crisis has been seen being taken into Downing Street.

It was photographed as an official went into Downing Street for a meeting of the National Security Council as the crisis deepened.

It makes clear the Government is not considering curbing trade with Russia - or closing London's financial centre to Moscow as part of any possible package of sanctions against the country.

The papers also suggest the UK will lobby to exclude any talk of a military response to the deepening crisis.

Sky's Jason Farrell said: "It looks like some kind of a briefing document that's being taken into the meeting.

"It does give away some of Britain's position towards Russia.

The unknown official with the document in Downing Street

"It does suggest there may be suspension of contracts with Russia. There is talk about suspending Russia from the G8 and putting in visa restrictions.

"But it says the UK should not support, for now, trade sanctions or close London's financial centre to Russia.

"It also talks of what the UK can do for Ukraine - technical assistance packages - ideally jointly with Germany and about the EU working to provide some kind of alternative gas supply if Russia cuts them off."

The document also talks of pushing UN Secretary General Ban Ki-moon "to take the lead in calling and creating a forum for engaging Russia on Ukraine", and accepting "a special European Council" for leaders to meet and discuss the crisis.

It also says the UK should "discourage any discussion" of any "contingency military preparations".

Farrell added: "It is extremely embarrassing that the points of discussion have come out in this way."

Prime Minister David Cameron said after the meeting Russia would face "diplomatic, political, economic" pressure in response to "violating the sovereignty" of Ukraine.

"What we want to see is a de-escalation rather than a continuation down the path that the Russian government has taken, violating the sovereignty and territorial integrity of another country.

"So we shall have to bring to bear diplomatic, political, economic and other pressures in order to make this point.

"That is the very clear message the whole world needs to send to the Russian government."

EU leaders are to hold an emergency summit in Brussels on Thursday to discuss the situation in Ukraine.

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Ukraine: US Halts Russia Military Engagements

The United States has put all military engagements with Russia on hold over Moscow's deployment of troops in Ukraine.

Pentagon spokesman Rear Admiral John Kirby said the measure included all military exercises, port visits, bilateral talks and planning conferences.

"We call on Russia to de-escalate the crisis in Ukraine and for Russian forces in Crimea to return to their bases, as required under the agreements governing the Russia Black Sea Fleet," he said.

Vitaly Churkin shows the letter purportedly from Viktor Yanukovych

It came as Moscow's UN envoy told a stormy meeting of the United Nations Security Council that Ukraine's ousted leader Viktor Yanukovych had sent a letter to Russian President Vladimir Putin requesting that he use Russia's military to restore law and order in Ukraine.

"The country has plunged into chaos and anarchy," Russian Ambassador Vitaly Churkin read from an unofficial translation of the letter while speaking to reporters after an emergency meeting of the UN Security Council.

"The country is in the grip of outright terror and violence driven by the West. People are persecuted on political and language grounds.

President Obama says Moscow's actions violate international law

"In this context, I appeal to the President of Russia Vladimir V Putin to use the armed forces of the Russian Federation to re-establish the rule of law, peace, order, stability and to protect the people of Ukraine."

Mr Churkin held up a copy of the letter for council members to see during a heated council session in which Western envoys and the Russian ambassador hurled allegations at each other for two and a half hours. He said the letter was dated March 1.

President Putin was filmed watching war games in Russia

But US President Barack Obama warned Moscow it would find itself "on the wrong side of history" - and that Russia's deployment of troops in Ukraine violates international law.

He spoke shortly after Mr Putin's aides were forced to deny reports that Russian forces have given the Ukrainian navy until 3am (5am local time) today to surrender.

:: Putin Watches Tanks Taking Part In War Games

America said any threat by Russia to Ukraine forces would represent a "dangerous escalation" in the crisis, and Moscow would be responsible.

Ukraine says Russia has deployed 16,000 troops to Crimea over the past week.

Hundreds of Russian soldiers have surrounded a military base near the Crimean capital Simferopol, preventing Ukrainian soldiers from going in or out.

Ukraine's military might is dwarfed by Russia's

Russian forces have also seized a border checkpoint on the Ukrainian border between Russia and Crimea, Reuters reported.

US State Department spokeswoman Jen Psaki said: "At this point we are not just considering sanctions given the actions Russia is taking, it is likely we will put those in place and we are preparing that.

"We have a broad range of options available."

However, US Senator John McCain criticised Mr Obama's handling of the crisis and described him as "totally naive".

Russia denies it told Ukraine forces in Crimea to surrender

He told Sky News it was time the US had a "cold-eyed view of Putin" and said it should immediately impose "severe economic sanctions" on Moscow and reinstall missile defence systems in the Czech Republic and Poland.

Samantha Power, US Ambassador to the UN, told the UN Security Council in New York that Russia's actions are a violation of international law and a "response to an imaginary threat".

She said there is no "legal basis" for Moscow's troop deployment and the way to resolve the crisis is through talks between Ukraine and Russia.

British Prime Minister David Cameron called for the world to send Russia a "clear message" about its actions.

He spoke separately to German Chancellor Angela Merkel and French President Francois Hollande on Monday night.

A Number 10 spokesman said: "In both calls, the leaders agreed that the international community should speak with one voice and send a clear message to Russia that its actions in Ukraine were completely unacceptable."

Nato will hold more emergency talks on the crisis on Tuesday after Poland requested consultations with its allies on the threat posed by Moscow.

The developments came as Mr Putin watched tanks and armoured vehicles taking part in military exercises at a training ground in north-west Russia.

Mr Putin attended the war games to test the combat-readiness of his armed forces in western and central parts of Russia, regions adjacent to Ukraine, a spokesman said.

The Russian foreign ministry said Nato's criticism of its actions in Crimea "will not help stabilise" the situation in Ukraine.

Earlier, it was reported that Russia had given Ukrainian forces in Crimea a deadline of 3am to surrender or face military action after troops seized key strategic sites in the peninsula.

The ultimatum reportedly came from Alexander Vitko, commander of Russia's Black Sea Fleet, which has a base in Crimea where Russian forces are now in control.

According to Russia's Interfax agency, it reads: "If they do not surrender before 5am (3am UK time Tuesday), a real assault will be started against units and divisions of the armed forces across Crimea."

But in a conflicting report, Interfax quoted an official representative for the Russian Ministry of Defence as saying the ultimatum was "total nonsense".

The crisis has had a huge effect on global stock markets, with Moscow's stock exchange plunging more than 10% on Monday.

Russia's central bank raised its rate to 7% from 5.5% as the ruble hit an historic low against the dollar and the euro.

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Russia Stands With Putin Over Ukraine Gamble

President Vladimir Putin asked his parliament for permission to use Russian troops in Ukraine, but the result was never in doubt.

His senate voted unanimously in favour with almost palpable glee, applauding themselves as they did.

Where much of the international community sees a leader dangerously poised on the verge of annexing Crimea, his supporters see much to like.

The case that Mr Putin is making is one that resonates well in Russia: that he is being forced to act to protect the lives of Russian citizens, compatriots, and Russian armed forces in Ukraine.

In other words, that he is defending Russian national interests and lives.

That much of the rest of the world considers those interests to be part of the sovereign territory of Ukraine is not necessarily a problem for Russia.

In Moscow, the state propaganda machine is already in overdrive, dismissing Oleksandr Turchynov as the "self-imposed president" and dismissing the mass protest movement as extremists and armed gangs.

Mr Putin has made his case and he will likely stick to it: that a legitimately-elected president has been overthrown and Russian citizens are under threat.

Mr Putin is ignoring international opinion to defend Russia's interests

And there are ever-increasing numbers of them to protect. An estimated 143,000 Ukrainians have been issued with Russian passports in the last two weeks, including members of the Berkut riot police.

The old Kremlin tactic of passport politics seems to be alive and flourishing in Ukraine.

The next 24 hours will see the inevitable volley of stern diplomatic warnings and rhetoric from all sides, but Moscow will be scrutinising all those words for any real threat of action, and so far there is not much to fear.

One commentator characterised US President Barack Obama's latest statement on Ukraine as: "Stop, or I'll say stop again."

The US has now paused preparations for this summer's Russian-hosted G8 summit.

Mr Putin does not respond to threats of condemnation. He has never sought approval, just respect.

He wants Russia to be seen as a great superpower once again, and himself as its strongman president.

If that means playing the bad cop in the West and weathering a diplomatic storm, he probably will not lose much sleep.

For Russia, this is about more than just the loss of Ukraine joining the EU. It's about Europe, Nato - the old Cold War bogeyman of the West - advancing right up to the Russian border, and Moscow does not like that at all.

Mr Putin wants to defend his sphere of influence and the national interest. They count for much more in the Kremlin than whether Mr Obama does or does not come to Sochi for G8.

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Ukraine's New Navy Chief Defects To Crimea

Ukraine has launched a treason case against its new navy chief after he switched allegiance to the pro-Russian Crimea region amid escalating tensions in the country.

Rear Admiral Denis Berezovsky was appointed head of Ukraine's navy on Saturday and the Kiev government was claiming that its Black Sea fleet remained loyal just a few hours ago.

Ukraine's leader has accused Russia of declaring war on his country and warned the nation was on the "brink of disaster".

Appealing to the international community for help, Prime Minister Arseniy Yatsenyuk said: "This is the red alert, this is not a threat, this is actually a declaration of war to my country."

A Russian warship enters the Crimean port of Sevastopol on Sunday

Ukraine has mobilised its military and called up all its reserves after Russia gave the go-ahead to send more troops into the country, in what has become the biggest confrontation between Moscow and the West since the Cold War.

Observers say the deepening crisis is just "a pace away from catastrophe", where the smallest act could take it "over the edge".

US President Barack Obama spoke to British Prime Minister David Cameron about the crisis on Sunday night.

Suspected Russian troops have surrounded a Ukrainian military base

They agreed that Russia's actions were "completely unacceptable" and said there must be "significant costs" if Moscow does not change course.

The US Secretary of State John Kerry condemned Moscow's "incredible act of aggression" in Ukraine, and warned of "very serious repercussions" including sanctions to isolate Russia economically.

"You just don't in the 21st century behave in a 19th century fashion by invading another country on a completely trumped up pretext," he told the CBS programme Face The Nation.

US officials said Mr Kerry will visit Kiev on Tuesday to lend support to the new interim leaders, and said Russian forces were "now in complete operational control of the Crimean peninsula."

Ukrainian soldiers have blocked the entrance to the base with a tank

Nato's Secretary General Anders Fogh Rasmussen has called on Russia to de-escalate tensions.

"What Russia is doing now in Ukraine violates the principles of the United Nations charter. It threatens peace and security in Europe," he said.

In response to the military action in Ukraine, Britain and France have pulled out of preparations for a summit of world leaders in the Russian resort of Sochi in June.

People attend a rally in Kiev against Russian intervention in Ukraine

British Prime Minister David Cameron also said it would be "wrong" for ministers to attend the Paralympics in Sochi because of the "serious situation" in Ukraine.

UK Foreign Secretary William Hague, who has flown to the Ukrainian capital Kiev, said the country's sovereignty and territorial integrity had been "violated".

Russian forces have taken over the Ukraine's southeast Crimea region where Moscow has a naval base, and more troops are on their way, prompting accusations of a "military invasion".

Despite mounting international condemnation, Russian President Vladimir Putin has declared he has the right to protect Russian citizens and interests in Ukraine.

This is the same justification used in the 2008 invasion of Georgia over two breakaway regions, which have large ethnic Russian populations.

On Saturday, US President Barack Obama warned Mr Putin during a 90-minute phone call that Russia had flouted international law and urged him to withdraw forces.

In the latest development of the unfolding crisis, hundreds of suspected Russian troops have surrounded a Ukraine military base, preventing soldiers from going in or out.

The convoy blockading the site near the region's capital Simferopol includes at least 17 military vehicles, which have Russian number plates.

People pose for a picture in front of an armoured vehicle in Crimea

The Ukrainian personnel inside have blocked the gate with a tank.

Meanwhile, there have been pro-Moscow demonstrations in east Ukraine, where most people speak Russian.

But in Kiev's Independence Square, where months of protests led to the downfall of pro-Russian President Viktor Yanukovych, there were demonstrations against military action.

Speaking about the Ukraine, former Liberal Democrat leader Paddy Ashdown, who served in the special forces, told Sky's Murnaghan programme: "I think we are a pace away from catastrophe at the moment.

"It would require one foolish act, I don't know, a trigger happy Russian soldier, a Ukrainian guard who acts aggressively at one of these institutions that has been taken over by Russia or Russian supporters.

"A foolish act now could tip us over the edge. The one thing that is absolutely essential now is that the West speaks with a single voice."

Thousands attend a rally on Sunday in Kiev's Independence Square

This was echoed by Sir Tony Brenton, the former British ambassador to Russia, who told Murnaghan: "It only requires one person to make a mistake for things to go very badly wrong."

Ukraine's population is divided in loyalties between Russia and the West.

Much of western Ukraine advocating closer ties with the European Union. However, the eastern and southern regions look to Russia for support.

Crimea has 2.3 million inhabitants, most of whom identify themselves as ethnic Russians and speak Russian.

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Ukraine Is Game Of High-Stakes Poker For Obama

Barack Obama says Ukraine is not a cold war chess game and he is not going to play it.

Actually it is more like high-stakes poker. The President plays poker and whether he likes it or not he is at the table for this game, up against the Russian leader Vladimir Putin.

President Obama does not have a good hand. There are no military options, and European allies are apparently divided and too poor to offer Ukraine the economic help it needs.

Mr Obama knows the US cannot offer much more. Were he to go to Congress and ask for billions of dollars to help the fledgling Ukrainian government, the answer would probably be no.

Mr Putting has upped the stakes with Barack Obama

Vladimir Putin knows exactly what his American opponent has in his hand. Conversely the Russian leader is keeping everyone guessing.

On Friday afternoon Mr Obama made a play, threatening unspecified costs if Russia intervenes in Crimea.

Mr Putin read his opponent and called his bluff, upping the ante and asking for parliamentary approval to intervene in Ukraine - that's Ukraine, not just Crimea.

Who makes the next move? In trying to predict Vladimir Putin's calculations it is worth noting that he spent years and billions preparing for the Sochi Winter Olympics, all to enhance Russia's prestige and reputation.

In two days he has undone all of that with an act of naked aggression drawing condemnation from the rest of the world.

That is all you need to know about how important Crimea is to President Putin and to Russia.

Historic ties, the feelings of its people and the Russian military bases on the peninsula are worth an enormous amount.  It is hard to know what the US can threaten to alter that calculation.

Pro-Russian demonstrations are taking place in parts of Ukraine

The more costs the president threatens the more the Russian leader is likely to call his bluff and the weaker Mr Obama is going to appear.

The alternative is to do next to nothing, with his Republican rivals lambasting his impotence.

In a sense the president is damned if he does, damned if he doesn't.

He can threaten to pull out of the G8 summit in Sochi in Russia and persuade others to do the same.

He could threaten to throw Russia out of the G9.

He can warn Russia about the economic costs of its action.

But all the signs are that it will not make any difference.

:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.

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Ukraine Crisis: Russia To 'Protect Interests'

Russian President Vladimir Putin has warned the United States that he retains the right to protect Russia's interests in east Ukraine and Crimea as tensions escalate.

Mr Putin issued the stark warning in a 90-minute phone call with US President Barack Obama, in which the two leaders disagreed over the deepening crisis.

A statement from the Kremlin said unrest in Ukraine posted "a real threat to the lives and health of Russian citizens and the many compatriots who are currently on Ukrainian territory".

"Russia retains the right to protect its interests and the Russian-speaking population of those areas," the statement added.

Mr Obama was on the phone with Mr Putin for 90 minutes

During the call, Mr Obama accused Russia of a "clear violation of Ukrainian sovereignty and territorial integrity", and expressed his "deep concern" over Russia's actions.

The White House said: "The United States calls on Russia to de-escalate tensions by withdrawing its forces back to bases in Crimea and to refrain from any interference elsewhere in Ukraine."

The Kremlin has been accused of sending 6,000 troops into Crimea, despite calls from the US and Britain for Moscow to back off.

Ukraine's Acting President Oleksander Turchinov has ordered his country's army to be placed on high combat alert.

A soldier stands next to a sign that says: 'Crimea Russia'

Two Russian anti-submarine warships have also appeared off the Crimea coast, violating an agreement on Moscow's lease of a naval base, Interfax news agency reported.

The two vessels, part of Russia's Baltic Fleet, have reportedly been sighted in a bay at Sevastopol, where Moscow's Black Sea Fleet has a base.

Sky's Dominic Waghorn said Mr Obama and Mr Putin appear to be in disagreement over what should be done to de-escalate the crisis.

"The phone call didn't go very well, it seems. We have each leader, it looks like, lecturing each other," he said.

Russia claims gunmen from Kiev tried to seize Crimea's interior ministry

"The problem clearly here is that Barack Obama may regard Vladimir Putin as a throwback to the Cold War who has ended up somehow running Russia in 2014.

"The two leaders have no real way, on a personal level at least, of working it out and resolving this crisis."

In response to Russia's aggression, the US has already announced it will suspend participation in preparatory meetings for the G8 summit in Sochi in June.

European foreign ministers are also due to hold emergency talks in Brussels on Monday.

British Foreign Secretary William Hague said he was "deeply concerned" by the situation and the decision of the Russian parliament to authorise military action.

"This action is a potentially grave threat to the sovereignty, independence and territorial integrity of Ukraine. We condemn any act of aggression against Ukraine," he said.

After unrest in Kiev, tensions have shifted to the Crimea region

Mr Hague is due to visit the country today and hold talks with Ukraine's new leaders.

Pro-Russia demonstrations have been held in major cities in the east and south of Ukraine, where supporters of the new Ukrainian government in Kiev have been beaten up.

The autonomous republic of Crimea has a prime minister loyal to Moscow, but the government in Kiev has vowed to maintain the country's territorial integrity.

Reports suggest that Russian troops are trying to occupy an anti-aircraft missile base and have taken control of airports on the peninsular.

Ukraine's border guard service said about 300 armed men were attempting to seize its main headquarters in the port city of Sevastopol.

Russian helicopter gunships have also been seen in Ukrainian airspace.

Russian soldiers are guarding buildings in Crimea

But there were claims by Russia that gunmen from Kiev had been sent to seize the offices of Crimea's interior ministry.

There was grainy footage of an unidentified armed group breaking into a building, with smoke rising and reports that people had been "wounded".

In what appears to be an orchestrated move, a referendum on whether residents in Crimea want greater independence from Ukraine has been brought forward by two months to March 30.

Russia's Lower House of Parliament, the Duma, has called on Mr Putin "to take measures to stabilise the situation in Crimea".

Ukraine's population is divided in loyalties between Russia and the West.

Much of western Ukraine advocating closer ties with the European Union. However, the eastern and southern regions look to Russia for support.

Crimea has 2.3 million inhabitants, most of whom identify themselves as ethnic Russians and speak Russian.

:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.

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