US Gives $2bn To Ukraine As Fighting Continues

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By Sky News US Team

The US is providing Ukraine with $2bn (£1.3bn) to help with "near-term social spending" in the war-torn country.

The deal came as America and the European Union said they were considering further sanctions on Russia to stop its support for separatists in eastern Ukraine.

After signing the loan guarantees agreement with Ukrainian Finance Minister Natalia Yaresko, US Treasury Secretary Jack Lew criticised "Russian aggression" in the region.

"We remain prepared to do more (on sanctions) if necessary. To that end, we will continue to work with our allies to increase the pressure on Russia," he told reporters at the signing ceremony.

Sanctions could be eased if Moscow abides by the Minsk agreement signed last September, which called for a ceasefire and the withdrawal of Russian fighters and military equipment from Ukraine, he said.

Moscow denies Western and Ukrainian claims it has sent forces into the country.

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Gallery: At Least 30 Dead In Ukraine Rocket Attack

At least 30 people have been killed and 83 wounded in an attack on a residential area in the port city of Mariupol.

Ukraine's Interior Ministry says long-range rockets were fired on homes, buildings and a busy open air market.

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The attack came after rebels promised to escalate their campaign of violence.

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Separatist leader Alexander Zakharchenko has confirmed they launched the attack on Mariupol on Saturday morning.

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Mariupol, in the Donetsk region, is strategically important because it lies between the Russian mainland and Crimea, which was annexed by Russia in March.

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Kiev says the rebels are supported by 9,000 Russian soldiers.

Like other major donors to Ukraine, Mr Lew said the US deal depends on the ex-Soviet republic continuing with fiscal and anti-corruption reforms and meeting its loan programme with the International Monetary Fund.

IMF officials are in Kiev negotiating a $17bn bail-out package, which Ukraine's allies hope will be increased to help it with debt repayments due this year.

On Wednesday, Kiev said three more Ukrainian soldiers have died in the past 24 hours, adding to a mounting death toll that has seen over 5,000 people killed since last April.

A rebel advance last week shattered a five-month truce in the conflict.

US President Barack Obama and German Chancellor Angela Merkel expressed their concern about Russia's actions in eastern Ukraine in a phone call late on Tuesday and agreed on the need for funds to stabilise the Ukrainian economy.

The White House said both leaders were worried about "Russia's material support for the separatists" and its failure to uphold September's ceasefire agreement.

In a statement, it added that they "agreed on the need to hold Russia accountable for its actions".

EU foreign ministers are likely to ask for new sanctions against Russia at a meeting on Thursday, although a final decision will be taken by EU leaders at a summit on 12 February.

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