Meanwhile, Russian President Vladimir Putin has warned that Europe faces "major transit risks" to natural gas supplies from Russia this winter.
Putin told reporters in Belgrade on October 16 that if Ukraine siphons off natural gas without permission from transit pipelines to the European Union, Russia “will consecutively reduce the stolen volume at the cost of supplies."
Putin made the remarks ahead of talks in Milan on October 16 and 17 with EU leaders and Ukrainian President Petro Poroshenko.
Russia raised the price it charges Kyiv for natural gas after Ukraine's pro-Russia Preident Viktor Yanukovych was ousted in February, then halted gas supplies to Ukraine in June when Kyiv failed to pay the higher price.
The price standoff is the third between Moscow and Kyiv since 2006.
Russia is the EU's biggest gas supplier, providing about a third of the gas consumed there.
Barring any major developments that concludes the live blogging for today.
After last night's meeting with Merkel, Putin has met with leaders at a bigger breakfast meeting:
Russian President Vladimir Putin held a breakfast meeting with European leaders and Ukraine's Petro Poroshenko on October 17 after failing to bridge differences over the Ukraine crisis in late-night talks with German Chancellor Angela Merkel.
A two-day Europe-Asia summit in Milan is being overshadowed by the crisis in Ukraine, where deadly fighting persists in the east despite a cease-fire between government forces and pro-Russian separatists the West says are supported by Russian troops and weaponry.
The breakfast meeting was attended by Putin, Merkel, and Poroshenko as well as French President Francois Hollande, British Prime Minister David Cameron, Italian Prime Minister Matteo Renzi and outgoing EU leaders Herman Van Rompuy and Jose Manuel Barroso.
Images from a lengthy Putin-Merkel meeting that stretched past midnight showed the two facing each other across a table, their faces unsmiling.
The Kremlin said they still had "serious differences of opinion about the genesis of the internal Ukrainian conflict as well as about the causes of what is happening there now."
Here's a pic of them.
It's a breakfast meeting but there doesn't seem to be any breakfast.
Latest on the Milan summit from our news desk:
Italy's prime minister said he was "really positive" about the prospects for a solution to the Ukraine conflict after talks attended by Russian President Vladimir Putin, Ukrainian President Petro Poroshenko, and European leaders in Milan, but there was no immediate sign of a breakthrough.
"In general, I am really positive after this meeting," Italian Prime Minister Matteo Renzi said after the talks over breakfast on the sidelines of a Europe-Asia summit.
Putin said the meeting was "good, positive".
British Prime Minister David Cameron said Putin assured the other leaders that Russia does not want a divided Ukraine or a frozen crisis.
The meeting came hours after the Kremlin said talks between Putin and German Chancellor Angela Merkel had left "serious differences of opinion" over the crisis in Ukraine, where fighting between government troops and pro-Russian rebels has killed more than 3,660 people since April.
Then there's this: