Putin says Russia has pulled troops from Ukraine border

A handout picture released by the Prime Minister Press Service shows Ukraine's Interim Prime Minister Arseniy Yatsenyuk (L) embracing a trooper during his visit to a checkpoint near the Ukrainian eastern city of Slavyansk on May 7, 2014. President Vladimir Putin told pro-Russian rebels fighting in east Ukraine to halt plans for independence referendums and said his troops had been withdrawn from the border, a potential breakthrough in the worst showdown between Moscow and the West since the Cold War.

MOSCOW,

President Vladimir Putin on Wednesday told pro-Russian rebels fighting in east Ukraine to halt plans for independence referendums and said his troops had been withdrawn from the border, a potential breakthrough in the worst showdown between Moscow and the West since the Cold War.

The Russian leader also hailed a planned May 25 presidential election in Ukraine, previously criticised by the Kremlin, as a "move in the right direction".

The softer tone of the surprise comments -- delivered during a meeting in Moscow with the visiting head of the OSCE -- suggested a potential resolution of the geopolitical confrontation and on-the-ground conflict in Ukraine that had been building towards war.

Russia's stock market immediately soared over three percent, and the battered ruble jumped to a five-week high against the dollar.

Russia's markets climbed sharply on Wednesday after President Vladimir Putin urged the postponement of a referendum on separate status for Ukraine's Russian-speaking regions and cautiously backed presidential polls.

The MICEX stock index climbed 3.45 percent while the RTS index rose 4.52 percent at about 1420 GMT.

The ruble also rose sharply against the euro and the dollar, with the euro worth 48.78 rubles and the dollar worth 35.03 rubles.

The Ukraine conflict with its recurrent threat of military intervention by Moscow caused the West to impose targeted sanctions and has led to massive capital flight from Russia.

The ruble has fall to levels last seen during the 2008 global financial crisis.

In early March ahead of the referendum in Crimea on joining Russia, the euro reached a peak value of 51.20 rubles and the dollar rose to 37 rubles.

NO SIGNS OF PULL OUT

NATO said Wednesday it had seen no sign of Russian troops withdrawing from the border with Ukraine, despite President Vladimir Putin's claim they have been pulled back.

"We have no indication of a change in the position of military forces along the Ukraine border," a NATO military official said.

Putin had said earlier that in response to Western concerns of a possible Ukraine invasion, Moscow had pulled troops back.

"We were told constantly about concerns over our troops near the Ukrainian border. We have pulled them back," Putin said.

"Today they are not at the Ukrainian border but in places of regular exercises, at training grounds," he said after meeting Swiss president and current OSCE chief Didier Burkhalter.

US and NATO officials estimate Russia massed 40,000 troops on the border with Ukraine as the Kiev government battles pro-Kremlin militias.