KIEV/MOSCOW - Russian President Vladimir Putin and his Ukrainian counterpart, Petro Poroshenko met face-to-face Tuesday for the first time since June with the crisis in eastern Ukraine topping the agenda of their talks.
Putin and Poroshenko shook hands as talks between the Eurasian Customs Union, EU and Ukraine began in Minsk, the capital of Belarus.
Their meeting in Minsk came as Ukraine said it had captured 10 Russian soldiers in eastern Ukraine.
Addressing a summit of the Russian-led Customs Union in Minsk, Putin asked his Ukrainian counterpart not to escalate an offensive against pro-Moscow rebels and said he's ready for an exchange of opinions on Ukraine.
Putin said that Moscow is interested in not only maintaining its cooperation with Ukraine, but even expanding it and threatened to scrap trade preferences with Ukraine if Poroshenko follows through on plans for closer relations with the European Union.
Putin said that a trade agreement between Ukraine and Europe will flood the Ukrainian market with European goods, which would then find their way into Russia.
"In this situation Russia cannot stand idle. And we will be prompted, I want to highlight this, will be prompted to take retaliatory measures, to protect our market," Putin said.
"We do not want to discriminate against anybody," he said. "We are simply going to implement a standard trade regime regarding Ukraine the same, which is used in relations between Russia and the EU."
Poroshenko replied with a demand to halt arms shipments from Russia to the separatist fighters in eastern Ukraine. He said the purpose of his visit was to start searching for a political compromise and promised that the interests of Russian-speakers in eastern Ukraine would be taken into account.
Poroshenko said: "Today in Minsk, without any doubt, the fate of Europe and the fate of the world is being decided. That's how I see the potential of our meeting. We should together find the only correct solution upon which nothing less than peace on the continent depends."
The meeting saw both sides give a fresh diplomatic push to end five months of fighting in eastern Ukraine that has left over 2,000 people dead.
Putin said the Ukraine crisis cannot be resolved through further escalation of force or without launching a peace dialogue with separatists in Ukraine's eastern regions.
Speaking at a high-level meeting in Minsk, Putin also said the Russian economy could suffer a loss of some 100 billion roubles ($2.77 billion) if European Union goods reach Russia via Ukraine, bypassing the tariffs Russia levies on EU goods.
"Russia cannot remain idle in such a case and we will simply be forced to take decisive measures to protect our market," he said, adding that it would include reversing trade preferences for imports from Ukraine.
Ahead of the talks in Minsk, Ukraine released videotaped interrogations of Russian soldiers it said had been captured in Ukraine. Kiev said they were part of a column of Russian infantry vehicles that its forces had attacked on Monday.
Moscow confirmed to Russian news agencies that the soldiers were Russian. "These servicemen did indeed participate in patrolling a section of the Russian-Ukrainian border, and crossed it probably by accident at an unequipped and unmarked section," the Defense Ministry told the Interfax news agency.
"They showed no resistance to Ukraine's armed forces when they were detained."