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Tycoon sends steelworkers to join police in eastern Ukraine

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Pro-Russian men hold their weapons atop a vehicle as they arrive to support their comrades at a checkpoint outside Slovyansk, eastern Ukraine, Thursday, May 15, 2014. On Thursday, Ukraine's acting president, Oleksandr Turchynov, claimed the Ukrainian army destroyed an insurgent base in the city of Slovyansk and another one in nearby Kramatorsk, about 150 kilometers (95 miles) west of the Russian border. (AP Photo/Alexander Zemlianichenko)

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Pro-Russian men hold their weapons atop a vehicle as they arrive to support their comrades at a checkpoint outside Slovyansk, eastern Ukraine, Thursday, May 15, 2014. On Thursday, Ukraine's acting president, Oleksandr Turchynov, claimed the Ukrainian army destroyed an insurgent base in the city of Slovyansk and another one in nearby Kramatorsk, about 150 kilometers (95 miles) west of the Russian border. (AP Photo/Alexander Zemlianichenko)

KYIV, Ukraine - Steelworkers employed by Ukraine's biggest tycoon have joined police on patrol in some disputed eastern Ukrainian cities, and the company said Thursday that its officials had struck a deal with police and pro-Russian separatists in one of the cities for the insurgents to leave occupied government buildings.

It was unclear how significant the development was. Photographs posted by police did not reveal whether the steelworkers were armed, and it was unknown whether they intended to confront the armed separatists who have declared parts of eastern Ukraine independent.

But police said the patrols in Mariupol and Makeevka had helped solve or prevent crimes, including robbery. Mariupol, a city of about 495,000 in the Donetsk region, was gripped by violence last week when clashes between police and protesters killed at least seven people.

The steelworkers are from plants belonging to Metinvest, part of the business empire of Rinat Akhmetov, believed to be Ukraine's richest man. On Wednesday, Akhmetov issued a statement calling on Donetsk to remain part of Ukraine, arguing that independence or absorption into Russia would be economically catastrophic.

That warning did little to dampen separatist fervour in the Donetsk region, where insurgents calling themselves the Donetsk People's Republic announced a parliament on Thursday. After a weekend referendum denounced as illegitimate by both Ukraine's central government and the West, separatists in Donetsk and the neighbouring Luhansk region declared themselves independent.

However, a Donetsk People's Republic leader in Mariupol was party to an agreement with steel plant directors and local police on improving security in the city and vacating separatist-occupied buildings, according to a Metinvest statement. That could indicate that Akhmetov, through his companies, could play an influential role in the crisis.

Russian President Vladimir Putin, meanwhile, added pressure on Ukraine on Thursday by saying it must pay in advance for Russian gas supplies starting next month. Ukraine is heavily dependent on Russian gas, especially for the heavy industries that are the core of Akhmetov's business.

Putin said Ukraine's debt for Russian gas supplies stands at $3.5 billion, and criticized it for refusing to pay despite a $3.2 billion bailout from the International Monetary Fund. He said it will have to switch to pre-paid gas beginning June 1.

The Russian president first warned of the move in April in a letter to European leaders, whose nations are customers of the Russian state-controlled natural gas giant Gazprom. Ukraine serves as a major conduit for Russian gas supplies to Europe, and pricing disputes have led to shutdowns in the past.

Ukraine says it would pay if Moscow restores the price discounts cancelled after pro-Russian President Viktor Yanukovych was toppled in February following months of protests.

Russia denounced Yanukovych's ouster as a coup and sent its troops to take over Ukraine's Black Sea peninsula of Crimea, which it annexed weeks later. In April, a mutiny erupted across Ukraine's vast eastern industrial heartland, where pro-Russian insurgents seized government buildings and fought government troops.

Native Russian speakers predominate in the east and many allege the central government is a nationalist junta bent on repressing them.

The insurgents in Donetsk on Thursday announced the creation of their own parliament and Cabinet. The new defence minister is Igor Strelkov, the leader of the insurgents' armed wing who Kyiv says is a Russian intelligence officer.

"A civil war is underway, and it's important for us to create a power bloc to successfully fight the Kyiv junta," said Yelena Korovkina, a member of the self-proclaimed parliament.

Kyiv and the West allege Russia is fomenting the unrest in the east, and have imposed sanctions on Russia. Moscow denies involvement.

A European-backed "road map" for peace, also supported by Moscow, got off to a rocky start this week. The first in a series of round-table discussions was held in Kyiv on Wednesday, but the government refused to invite representatives of the insurgents, saying it wouldn't talk to "terrorists."

The next round of talks is expected on Saturday, and the insurgents said it should be held in Donetsk. Denis Pushilin, speaker of the self-declared insurgent parliament, said it should focus on an exchange of prisoners and the pullout of government forces, which he called "occupation troops."

In Moscow, Russian Foreign Ministry spokesman Alexander Lukashevich criticized what he called a "stubborn reluctance of the authorities in Kyiv to launch a real process of national reconciliation."

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