New peace bid as Kiev warns of war

European leaders are desperately pushing a new peace bid for Ukraine as the country slipped towards what its interim president warned Monday was already a "war" in the face of spreading violence.

Oleksandr Turchynov told Ukrainian television that roadblocks had been set up around the capital over fears of "provocative" action by covert Russian operatives on May 9, when Ukraine celebrates victory in World War II.

"War is in effect being waged against us, and we must be ready to repel this aggression," said Turchynov, who has placed Ukraine's armed forces on combat alert and reintroduced conscription amid fears of a Russian invasion.

The warning came as the ex-Soviet republic spiralled further into a chaos that many fear could result in open civil war.

In a last ditch effort to head off a wider confrontation, the chairman of the Organisation for Security and Cooperation in Europe, Didier Burkhalter, was due in Moscow on Wednesday amid calls for his group to mediate between Kiev and the separatists in the east.

But while preparations for his visit were under way, Ukraine's military tightened its stranglehold around the rebel bastion of Slavyansk in the east, cutting off its main road access to the regional capital Donetsk and completely encircling the flashpoint town.

An AFP reporter in Slavyansk said explosions and small-arms fire were heard overnight although the centre remained relatively calm.

The violence wracking Ukraine has spread from pro-Russian bastions in the east to the scenic southern port city of Odessa, where dozens of people have died in clashes.

On Sunday, an angry mob of thousands of pro-Russian militants stormed the Odessa police headquarters and forced the release of 67 of their comrades who had been arrested during deadly clashes two days earlier.

Ukraine observed two days of mourning after Friday's violence in Odessa, where running street battles between rival militants culminated in a building fire that killed 38 people. Four others died in gun battles.

- 'Inefficient' police -

On a visit to Odessa on Sunday, Prime Minister Arseniy Yatsenyuk vowed a full investigation into the violence and blamed what he called the "inefficient" police force.

The violence was part of a Russian plan "to destroy Ukraine and its statehood," Yatsenyuk charged.

Interior Minister Arsen Avakov said on Monday that 42 of the remaining inmates arrested during the clashes would be moved to other parts of Ukraine to prevent further bids to spring them.

"The Odessa police acted in a disgraceful and possibly criminal way. The police chiefs have been fired. We are investigating their actions."

Marches also took place in the industrial eastern hub of Donetsk overnight but AFP reporters said the city was calm early on Monday.

Kiev has vowed to continue what it calls an "anti-terrorism" operation to flush out rebels who have occupied more than a dozen towns and cities in the east of the country.

At least 10 people including four servicemen have died in the military action, focusing mainly around Slavyansk and the nearby towns of Kramatorsk and Kostyantynivka.

With the violence flaring on the ground, impetus was being given to the intense diplomatic efforts to dial down the national and geopolitical tensions. The crisis has already pushed East-West relations back to near Cold War levels.

- Round-table talks -

The visit by Burkhalter, who is also the Swiss president, was agreed in a phone call between Russian President Vladimir Putin and German Chancellor Angela Merkel late Sunday.

"Putin and Merkel stressed the importance of effective international action -- especially by the OSCE -- in reducing the tensions in Ukraine," Russia said in a statement.

Merkel's office said "round-table discussions" would be set up under OSCE auspices to "facilitate national dialogue before the presidential election" planned for May 25.

German Foreign Minister Frank-Walter Steinmeier told German television that he was in talks with the Russians, the United States, the European Union and the OSCE to hold a second peace conference in Geneva.

A first effort to defuse the crisis was agreed in the Swiss city on April 17. But Russia last week pronounced the accord dead after Kiev stepped up military operations that Moscow slammed as "war against its own people".

As the diplomatic war of words heated up, Moscow has also criticised as "absurd" plans to hold the presidential election given the violence raging across the country.

Moscow's stance has raised the prospect of tougher US sanctions on whole sectors of the recession-hit Russian economy.

US President Barack Obama has warned the West would step up its punitive action if Moscow continued what he called the "destabilisation" of Ukraine.

French Foreign Minister Laurent Fabius tweeted that Europe was "not responding as it should" to the crisis "because of its energy dependence" on Russia.

Moscow has threatened to turn off the gas taps to Ukraine -- and by extension several European countries -- if Kiev does not pre-pay its June bill.

Kiev and the West accuse Russia of fomenting the chaos in the former Soviet republic, a charge Moscow vehemently denies.

The separatists in Ukraine are preparing their own spoiler of the May 25 election by moving ahead with plans to hold an independence referendum on Sunday.

The presidential vote was called by Ukraine's new leaders shortly after the ouster of pro-Kremlin president Viktor Yanukovych in February, the culmination of months of sometimes deadly pro-EU protests.

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