Ukraine rebels defy truce extension as EU mulls more sanctions

Separatist rebels in eastern Ukraine continued to violate a truce extended today by the country's government after the European Union gave Russia three days to stop the insurgency or face deeper sanctions.

EU leaders in Brussels demanded on Friday that the separatists, whom Ukraine and its allies say are backed by Russian President Vladimir Putin's government, release hostages and start talks to implement a peace plan drawn up by Ukrainian President Petro Poroshenko by June 30. While rebel leaders agreed to the extension yesterday, according to news service Interfax, the Defense Ministry in Kiev said they continued to fire on Ukrainian government positions overnight.

"Despite peace initiatives by Ukraine's leadership and a unilateral cease-fire, the situation in the Eastern regions continues to escalate," the ministry said in a statement. "Insurgents are ignoring the peace plan to ease the situation in Ukraine's east and keep attacking troops."

The EU leaders said that failure to meet their demands will result in "further significant restrictive measures" against Russia, according to a statement issued on Friday.

"If no visible progress is made on these points, then we are prepared to take further decisions, including drastic measures," German Chancellor Angela Merkel said after the meeting. "We expect progress to come really in the hours ahead."

US sanctions

The US also blames Putin for supporting rebels and stoking violence the United Nations says has killed more than 400 people in the country of more than 40 million. The US is preparing sanctions against Russia on technology aimed at exploiting and producing oil and gas products, a major part of that country's economy, according to three people briefed on the plans.

White House press secretary Josh Earnest said the conditions "are very specific steps that the Russians can take by Monday" or face more economic costs.

While the separatists are intent on controlling the territory they've seized, the U.S. was pushing Ukraine into conflict with Russia, Russian Foreign Minister Sergei Lavrov said, adding that Putin seemed to be trying to ease tensions and said the government in Kiev must consult with the regions on devolving power.