Ukraine Plays Risky Hand with Self-Rule Offer

Ukraine leaders have played a risky hand granting self-rule to the rebellious east of the country -- a strategy that may halt months of bloodletting but could well open the door to Russia, analysts said Wednesday.

Moscow has hailed the move by Ukrainian lawmakers Tuesday, although some defiant rebel leaders insist they will not be dictated to by a government they reject in Kiev.

And the legislation has provoked anger among Ukrainian nationalists who fear it may lead to the permanent partition of the former Soviet republic.

"This was the probably the best of a bad lot of options," said Oleksiy Garan, politics professor at the state-run Kyiv Mogyla Academy university.

"It's an attempt to transform the military conflict into a political process... part of a broad diplomatic game between Ukraine an Russia with the West looking on," he told AFP.

"But I don't rule out that Russia could hijack the plan (by effectively swallowing up the eastern regions)."

The high-stakes legislation was drawn up under a European-brokered peace plan signed by Kiev, Moscow and pro-Kremlin rebel leaders to try to halt a five-month insurgency in the Russian-speaking east that has cost around 2,900 lives.

It offers the industrial hubs of Donetsk and Lugansk three years of almost complete autonomy, with local elections to be held on December 7.

It also gives the rebel regions -- collectively known as Donbass -- the right to use Russian, establish closer ties with local authorities across the border and appoint their own police and judges.

A separate law grants amnesty to fighters from both sides, protecting them from criminal prosecution over what rights groups say are abuses that could be classified as war crimes.

But fighting flared again Wednesday, with two civilians killed in Donetsk as the Ukraine military accused Russian troops and rebel militias of failing to keep to the ceasefire agreed 12 days ago.

Ukrainian Prime Minister Arseniy Yatsenyuk said the armed forces needed to be kept on a full combat readiness because "Russia is not going to grant us peace or stability".

But he said the only choice for Ukraine was peace, with the war costing such a high price in both human and financial terms -- six million dollars a day.

In the first reaction from Moscow, the foreign ministry said it was a "step in the right direction" that reflected the spirit of the truce deal signed in Minsk.

Russia has repeatedly denied any direct involvement in the conflict despite Western claims it sent in elite forces and heavy weaponry to help a rebel surge across southeastern Ukraine last month.

Insurgent leaders appeared to be hedging their bets over Kiev's overture.

Donetsk "deputy prime minister" Andrei Purgin told AFP the self-rule offer was "a positive signal" that deserved "careful study", a stance echoed by Lugansk rebel leader Alexei Karyakin.

But Donetsk "prime minister" Alexander Zakharchenko bluntly said it was up to the local authorities not Kiev to "decide what elections to hold and when".

Both the United States and Europe hailed the legislation as a sign of Kiev's commitment to peace but demanded that Russia and the rebels live up to their side of the bargain.

"The way is open for peace, but it is now incumbent on Russia and the separatists it supports to honor their ceasefire commitments and respect Ukraine’s sovereignty and territorial integrity," U.S. State Department deputy spokeswoman Marie Harf said in a statement.

She said Russia must end its "unlawful military intervention" in its western neighbor, which as already seen Moscow seize the Crimean peninsula after a lightning invasion in March.

Volodymyr Fesenko, the head of the Center for Political Studies Penta, said the autonomy legislation gave peace a "shaky chance".

"The special status law carries a lot of risk, but it's a chance to bring these regions back under Ukrainian control.

"War would mean the loss of Donbass and maybe even more territory."

Nationalist leaders in Ukraine have already accused President Petro Poroshenko of capitulating to Russian pressure and effectively ceding the east.

Volodymyr Gorbach, political analyst at the Institute for Euro-Atlantic Cooperation, said the adoption of the law had strengthened Poroshenko ahead of his White House meeting with President Barack Obama on Thursday.

"But domestically these steps are not good. They may demotivate the Ukrainian army and disappoint the people," he said.

"I am afraid that yesterday's vote could become the starting point of us conceding defeat and being subjugated in the face of the Russian aggression."