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Putin set for talks with Ukraine leader on gas sales, eastern cease-fire

The two presidents will seek to reach a permanent cease-fire between Ukrainian forces and pro-Russia rebels in the east, and resolve ongoing disagreements about Russian gas sales to Ukraine.

By Michael Holtz, Staff writer

With a temporary cease-fire barely holding in eastern Ukraine and winter approaching, Russian President Vladimir Putin and Ukrainian President Petro Poroshenko have agreed to hold talks in Italy this week.

Mr. Poroshenko said he recognizes that "the whole world has high expectations" for his meeting with Mr. Putin at this week鈥檚 Europe-Asia summit on Thursday and Friday in Milan, Reuters reports. The Kremlin said the two leaders spoke by telephone on Tuesday.

Restoring peace in eastern Ukrainian is the top priority, along with a聽pending energy crunch. Ukraine's easternmost provinces slid into chaos earlier this year after Ukrainians, alarmed by the overthrow of聽President Viktor Yanukovych,聽attempted to break away from what they claimed was a fascist junta in Kiev. The conflict eventually erupted into open fighting between Ukrainian government troops and a Russian-backed insurgency.聽

With the conflict still simmering amid a temporary cease-fire, Moscow and Kiev have both taken steps to defuse tensions ahead of this week鈥檚 meeting. Putin ordered 17,600 Russian troops to pull back from the border with Ukraine over the weekend in a show of goodwill, the Associated Press reported.

For his part, Poroshenko said on Sunday that a full cease-fire in eastern Ukraine could soon be reached under a peace plan that he and Putin have endorsed, The New York Times reported. But the Ukrainian leader is still expecting 鈥渄ifficult negotiations鈥 with Putin in Milan.聽Putin will also meet with Western European leaders for the first time since his trip to France in June to mark D-Day.

Both Europe and Ukraine hope to resolve a long-running dispute over Russia鈥檚 natural gas exports.聽A third of Europe鈥檚 gas comes from Russia, with about half of that flowing through Ukraine. In June, Gazprom, the Russian gas monopoly, cut off exports to Ukraine, citing an unpaid bill of $4.5 billion and disagreements over pricing in its decision.

The gas dispute between Russia and Ukraine could lead to a cut-off for Europe "without either side explicitly intending it" the Monitor鈥檚 Fred Weir reported in August.

The Washington Post reports that Ukraine's storage tanks are only 54 percent full.聽

But even if a deal with Russia is reached this week, experts say reform is still needed in Ukraine鈥檚 energy sector. Andriy Kobolyev, chief executive of the country's gas monopoly Naftogaz, explained why to the Post:

Mikhail Pogrebinsky, a political analyst in Kiev, said he expected the talks in Milan to generate progress.

"I think that the meeting in Milan will bring a breakthrough in the gas sphere," he told Reuters. "Russia will eventually sell gas to Ukraine, after Ukraine pays a symbolic part of its debt, this will allow Ukraine not to freeze in winter."