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Kiev - Russia cut off gas to Ukraine on Monday in a dispute over unpaid bills that could disrupt supplies to the rest of Europe and set back hopes for peace in the former Soviet republic.
After weekend violence that included the loss of 49 troops in the downing of a Ukrainian plane, Russia said Kiev missed a deadline for a $1.95bn debt payment and it would now only get gas it has paid for in advance.
It insisted Ukraine must also ensure that it lets Russian gas flow through international pipelines to Moscow's clients in the European Union.
Kiev and Moscow blamed each other for the failure to agree overnight on the price of future gas deliveries and refused to abandon well established positions: Russia offering a discount and Ukraine rejecting that as a tool for political manipulation.
The talks are bound up with the worst crisis between Russia and Ukraine since the Soviet Union collapsed - a crisis that has brought Western sanctions on Moscow, the Russian annexation of Crimea and Cold War-style sabre-rattling along the borders.
Western-backed Ukrainian President Petro Poroshenko, elected last month to replace the Kremlin-friendly leader ousted in February, said on Monday he wanted troops to regain full control of the border with Russia this week. After that, there could be a ceasefire and efforts to come up with a peace plan.
Hopes of a reduction in tension had already been dented before the failure of the gas talks by Saturday's shooting down of the aircraft by pro-Russian separatists at Luhansk in the east, an attack on Russia's embassy in Kiev and new accusations from Nato that Russia is arming the Ukrainian rebels.
All that sent Russian financial markets lower on Monday and helped oil and gas prices climb in Europe that were already firm on fears of supply disruption due to violence in Iraq.
"Thanks to the unconstructive position of the Ukrainian government, today a prepayment system was introduced," Alexei Miller, the chief executive of Russian state exporter Gazprom , told Prime Minister Dmitry Medvedev during a sombre meeting at a government residence at Gorki, outside Moscow.
He said Ukraine had "adopted a position that can only be called blackmail", adding: "They wanted an ultra-low price."
At a news conference, he pressed his argument, unable to contain his frustration over the failed talks which erased any previous momentum towards a compromise.
Moscow, he said, would no longer accept Kiev paying off part of its total debt to restart supplies. It would restart gas supplies only when Ukraine paid off all the almost $4.5bn it owed and paid up front for a month's deliveries, he said.
"Not about gas"
Ukrainian Prime Minister Arseny Yatseniuk accused Russia of deliberately blocking a deal to cause Kiev supply problems next winter, when temperatures plunge and heating needs increase.
"But it is not about gas. It is a general Russian plan to destroy Ukraine," Yatseniuk said in Kiev. "It is yet another step against the Ukrainian state and against Ukrainian independence."
Medvedev said some of Kiev's ruling elite were not up to the job, echoing outrage over Ukraine's acting foreign minister using a coarse anatomical expression to describe President Vladimir Putin during the weekend protests in Kiev.
"You can see this in many situations; from the paranoid behaviour of the acting foreign minister at the Russian embassy in Kiev to the failure of the prime minister of Ukraine to agree on gas on the basis of a discounted price," he said on Facebook.
