Putin: Gas Dispute Turning Into 'Real Crisis'

Putin made his remarks today during a meeting in Moscow with negotiators from both countries.

"You -- and I am talking both to Russian and Ukrainian participants of this meeting -- have simply caused a real crisis, and not only in the energy field. This crisis looks like a crisis between two countries, and that is very bad."

He is also reported to have proposed lending Ukraine $3.6 billion to help pay for a planned increase in Russian gas prices.

Putin's remarks come as talks continued in Moscow aimed at settling the dispute.

Russia wants to more than quadruple the price it charges Ukraine for gas at the start of 2006, bringing it into line with world market rates. Ukraine wants price increases to be phased in gradually over several years.

Ukrainian President Viktor Yushchenko today said that Russia's asking price for gas is unacceptable. He also promised Ukrainians that they won't go cold this winter.

If an agreement isn't reached, gas supplies to Ukraine could be shut off on 1 January.

(AFP/ITAR-TASS/AP/IFX)