'Day of Silence' for Ukraine army, rebels; Russian gas flows resume

KIEV (Reuters) - Ukrainian government troops and separatists said their forces were complying with an agreed "Day of Silence" in Ukraine's war-torn east on Tuesday, marking an attempt to forge an effective ceasefire which may lead to a new round of peace talks.

In a further step towards normalisation, Russia resumed shipments of natural gas to Ukraine on Tuesday, shut off for six months under a dispute over price and debt that ran parallel to the war waged by pro-Moscow separatists in Ukraine's east.

Kiev's military, announcing a suspension of combat operations from 10 a.m., said troops had recorded six violations by the rebels, while six Ukrainian soldiers had been killed in the 24 hours before the truce came into force. The separatists said the ceasefire was, for the moment, holding.

The Ukrainians see the Day of Silence as a litmus test of Russian-backed separatists' readiness to reinforce a September ceasefire which has been regularly breached with almost daily deaths among government forces, rebels and civilians.

Fighting in the past few weeks has been intense around the international airport in the city of Donetsk, the main separatist stronghold. The rebels are trying to wrest the ruins of the airport from government control.

If the truce holds on Tuesday, it could improve prospects of a new round of peace talks in the Belarussian capital Minsk involving Russia, Ukraine and the separatists under the auspices of the Organization for Security and Cooperation in Europe.

Talks by that "contact group" in Minsk in early September led to a 12-point blueprint for peace, including a ceasefire.

Since then, separatists have defied Kiev by holding elections for officials. Ukraine accuses Russia of sending more troops and weapons to aid the rebels.

"We have declared a Day of Silence three times in the past. This is the fourth time. One hundred and ninety-two people have been killed since September 5," army chief of staff Viktor Muzhenko told journalists in Kiev.

Moscow, which denies its troops are fighting in Ukraine although scores of them have died there, says Ukraine has violated the Minsk deal by continuing to fight. In Donetsk, rebel leader Alexander Zakharchenko said he had ordered his forces to cease firing from 10 a.m. and only to respond if attacked. "The ceasefire for the moment is being observed," he said.

The United Nations says more than 4,300 people have been killed in eight months of conflict which began after a Russian-backed president was ousted by street protests in February.

Russia has annexed Ukraine's Crimea peninsula and given support to separatists in the east, driving relations between Moscow and the West to the lowest since the Cold War.

Russian Foreign Minister Sergei Lavrov confirmed that a meeting of the contact group was planned in coming days, but said an easing of tensions in eastern Ukraine was still "a long way off".

INDEPENDENCE IN ENERGY

The restoration of flows of gas from Russia, after an upfront $378 million (241.25 million pounds) payment by Kiev for supplies this month, brings temporary relief to the national power grid short of coal and under further pressure from sudden freezing temperatures.

It also suits Moscow, which wants an uninterrupted flow of gas over Ukraine to supply its European customers in winter.

But a temporary resolution to their gas dispute does little to resolve the separatist war, with Ukrainians accusing Moscow of seeking to impose a "frozen conflict" that could keep eastern provinces beyond Kiev's control indefinitely. Moscow and the rebels now call eastern Ukraine "New Russia".

Ukraine's Prime Minister Arseny Yatseniuk said in a speech on Tuesday that Ukraine's independence hinged on achieving "independence in energy".

In comments certain to be seized on by Moscow to justify Russian policy, he also said Ukraine would act to scrap its neutral "non-bloc status", introduced by ousted president Viktor Yanukovich, and do more to bring its army up to NATO standards. Speaking of the need for wider reforms to break with "Russian and Soviet standards" and fight corruption, he said 28,000 civil servants had been sacked during the year and another 10 percent would be dismissed next year.

An IMF mission arrived in Kiev to start a fresh round of talks with Yatseniuk's government linked to a $17 billion loan package that may have to be ramped up due to the financial toll the separatist crisis has taken.

State coffers are at their lowest in ten years and Ukraine needs extra cash to service its debt and make gas payments at a time when the economy is contracting and the hryvnia currency hovers close to historic lows.

(Additional reporting by Alessandra Prentice in Kiev, Serhiy Kirichenko in Donetsk and Thomas Grove in Moscow; Writing by Richard Balmforth; Editing by Peter Graff)

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