(MENAFN- AFP) Russian President Vladimir Putin warned Europe Thursday its gas supplies could be at risk as he prepared for talks with Ukraine counterpart Petro Poroshenko at an Asia-Europe (ASEM) summit overshadowed by the crisis.
NATO meanwhile said it had seen no sign of any major Russian pullback from the Ukrainian border despite Putin saying earlier this week nearly 18,000 troops had been withdrawn from the frontier.
US and European Union leaders had welcomed that announcement as a positive gesture ahead of the Poroshenko talks but also reminded Putin that sanctions would remain in place until he stopped meddling in Ukraine completely.
With the financial markets in turmoil, partly due to the uncertainties over Ukraine, German Chancellor Angela Merkel tried to put the ball firmly in Putin's court.
Merkel said it was "first and foremost" Russia's responsibility to make sure a tenuous ceasefire and peace plan agreed last month with pro-Moscow rebels "really will be implemented."
Putin is due to meet Poroshenko early Friday, with Merkel, French President Francois Hollande, British Premier David Cameron and Italian leader Matteo Renzi all sitting in.
"We will be searching for dialogue here," Merkel said as she arrived for the ASEM summit.
The meeting was always expected to be difficult and the latest exchanges appear to make that more likely.
On Wednesday, Putin bluntly accused US President Barack Obama of outright hostility towards Russia.
Stressing that he would not be blackmailed by the West over Ukraine, Putin chillingly warned of "what discord between large nuclear powers can do to strategic stability."
- Gas supply talks -
The Russian president was also expected to hold separate talks with Merkel, notably on ensuring "uninterrupted gas supplies for Europe," Putin's top foreign policy advisor Yury Ushakov said.
Russia cut gas shipments to Ukraine in June, threatening widespread disruption to supplies in Europe as winter approaches.
Warming to the theme, Putin on Thursday said Europe faced "major transit risks" unless Ukraine settled its dispute with Moscow.
He would not be to blame, he said as he readied to come to Milan, insisting he did not want to see a repeat of 2006 and 2009 when a supply halt disrupted onward deliveries to Europe which gets about a third of its gas from Russia.
"I am very much hoping that it will not come to that," Putin said.
- Economy, markets slump -
The ASEM summit brings together more than 50 member states who share one of the world's largest trading relationships at a time of growing uncertainty over the economic outlook.
Those problems showed themselves Thursday as the financial markets sold off sharply once again on fears over Europe's stalled recovery and a slowdown in China, which for so long has been the driver of global growth.
"There is international uncertainty, the United States is slowing down, Europe has not found a way back to growth," French President Hollande said.
European Union leaders meanwhile stressed the need for ties with Asia to boost both economies, given the prospect of slower growth.
"My main message... is that today more than ever European and Asian nations need each other to achieve growth and development and to guarantee security and preserve stability," EU president Herman Van Rompuy said.
- China, Russia's 'natural ally' -
A key EU partner is China but Putin also lays claim to privileged ties, saying earlier this week China was Russia's "natural ally."
"We are natural partners, natural allies, we are neighbours," Putin said while Chinese Premier Li Keqiang praised the "inexhaustible" potential for cooperation between the two sides who earlier this year signed a mammoth $400 billion (310 billion euros) gas supply deal.
While Ukraine dominates the summit, there are other intractable territorial disputes in Asia also lying in wait.
Beijing has repeatedly clashed with Tokyo over ownership of a series of islands.
And China will likely run into flak over its claims to almost all of the South China Sea, a vital shipping route which is also believed to hold significant oil reserves.
Thai junta leader Prayut Chan-O-Cha meanwhile sparked protests by human rights activists, angry to see ASEM offering a welcome to the former general who seized power in a May military coup which the EU condemned sharply.
The two-day ASEM summit is the 10th since the forum was established in 1996.
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