EU delays new sanctions on Russia as Merkel talks Ukraine with Obama

Kiev: Europe on Monday postponed sanctions against Moscow ahead of a Ukraine peace summit as US President Barack Obama and German Chancellor Angela Merkel weighed options to end 10 months of bloodshed.

Merkel was in Washington as cracks between Europe and the United States seemed to emerge over the White House's mulling of sending arms to Ukraine, an idea flatly rejected by the German leader.

Officials from Ukraine, Russia, Germany and France, meanwhile, were hammering out the details for a four-way summit Wednesday on a European-brokered peace plan billed as a last chance to defuse the escalating conflict.

Ahead of the possible summit in Minsk, French Foreign Minister Laurent Fabius said the EU would hold off implementing new sanctions to improve the chances of halting fightng that has killed some 5,400 people.

"The latest peace initiative shows that things have begun to move," Fabius said in Brussels.

EU foreign ministers had been set to formally sign off on adding 19 more people to a sanctions list over Moscow's alleged backing of pro-Russian separatists in Ukraine.

Russian President Vladimir Putin has warned that a "number of points" still needed to be hammered out before the Minsk meeting can take place and wrangling was set to be intense as foreign ministry officials from the four nations met in Berlin.

Based on a largely ignored peace deal agreed in September in Minsk, the new plan may extend rebel control over territory they have seized in recent weeks, although Kiev is adamant the demarcation line agreed in September should not be shifted.

French President Francois Hollande has said the proposal includes the creation of a 50- 70-kilometre (31-44-mile) demilitarised zone around the current frontline. German foreign ministry spokesman Martin Schaefer said the Minsk talks' goal would be "a ceasefire to end the bloodshed and thus create space and time for political talks". The issues on the table include questions about levels of regional autonomy and future elections in rebel-controlled areas, Schaefer said.

In the United States, the White House is facing increasing calls to supply the outmatched Ukrainian army with more weapons to shore up its faltering defences. But Merkel and many European nations believe weapons could not overturn the military mismatch between Ukraine and the might of the Russian army, and would simply escalate the conflict.

The Kremlin has warned Europe and the US not to use the threat of arming Kiev to try to push Putin into an agreement over Ukraine. Ukraine and its Western allies accuse Moscow of sending troops and weapons to spearhead the rebellion, but Moscow denies the allegations despite the rebels acquiring heavy weaponry.

While the EU had looked set to extend its individual sanctions, there is no agreement to toughen broader economic sanctions and Spain warned an export ban in place now had already cost Europe some $21 billion euros ($23.8 billion).