Putin sits down with Ukrainian president for talks

The presidents of Russia and Ukraine sat down for talks today, meeting face-to-face for the first time since June on the fighting that has engulfed Ukraine's separatist east.

Russia's Vladimir Putin and Ukraine's Petro Poroshenko were joined by the presidents of Belarus and Kazakhstan and three senior officials from the European Union in the Belarusian capital of Minsk.

The meeting came as Ukraine said its forces had captured 10 Russian soldiers in eastern Ukraine and the shelling spread to a new front in the far southeast. Ukraine has repeatedly accused Russia of supporting and arming the rebels, which Russia denies daily.

"The fate of peace and the fate of Europe are being decided in Minsk today," Poroshenko said as the talks began.

Under pressure to seek a negotiated settlement and not a military victory, the Ukrainian president said the purpose of his visit was to start the process of searching for a political compromise and promised that the interests of Russian-speaking eastern Ukraine would be taken into account.

Putin devoted most of his opening remarks to trade, arguing that Ukraine's decision to sign an association agreement with the EU would lead to huge losses for Russia, which would then be forced to protect its economy.

Russia had been counting on Ukraine joining a rival economic union that it is forming with Belarus and Kazakhstan. Ukraine is set to ratify the EU association pact in September.

On the fighting that began in April between Ukrainian troops and pro-Russia separatists, Putin said only that he was certain the conflict "could not be solved by further escalation of the military scenario without taking into account the vital interests of the southeast of the country and without a peaceful dialogue of its representatives."

Poroshenko would be unlikely to agree to Russia's frequent call for federalisation -- devolving wide powers to the regions from the central government -- but could agree to allow them to have some expanded powers.

He also has spoken against holding a referendum on Ukraine's joining NATO; Russia's desire to keep Ukraine out of the alliance is seen as one of Moscow's key concerns.

Opening today's meeting, Belarusian President Alexander Lukashenko urged both sides to "discard political ambitions and not to seek political dividend."

Putin has so far ignored requests from the rebels to be annexed by Russia -- unlike in March, when he annexed Ukraine's Crimean Peninsula. But Associated Press journalists on the border have seen the rebels with a wide range of military equipment -- including tanks, Buk missile launchers and armored personnel carriers -- and have run into many Russians among the rebel fighters.