Confusion Over Ukraine 'Permanent Ceasefire'

Vladimir Putin says a ceasefire deal between Ukraine and pro-Russian rebels could be reached by Friday.

The Russian President's announcement comes after conflicting reports a permanent ceasefire agreement had been reached by the two sides this morning.

Following witness reports of loud artillery explosions near the Ukrainian city of Donetsk, the country's President Petro Poroshenko modified that statement to remove the word "permanent".

Putin and Poroshenko were unable to agree when they met last week

It is unclear whether his actions were in response to the reports.

Reporting from Mariupol, Ukraine, Sky's Moscow Correspondent Katie Stallard said: "It's extremely unclear at this stage, what exactly this cease-fire is supposed to be and no one we have spoken to on the ground seems to know about it.

"The Ukrainian president issued a statement this morning claiming he agreed with Vladimir Putin to a permanent ceasefire in the region. He has since slightly modified that statement and removed the word 'permanent'.

"A spokesman for President Putin said no such agreement has been reached, nor can it, because Russia is not a party to the conflict."

Mr Putin's spokesman was earlier quoted as saying the leaders' views "overlap to a considerable degree" and a statement from Kiev said an understanding was achieved which would enable the "establishment of peace".

"The heads of state exchanged opinions about what needs to be done first in order to bring an end to the bloodletting in the southeast of the country as soon as possible," said Dmitry Peskov.

News of the developments had been greeted with an immediate rally on the markets - the main Russian stock exchange, the Micex, rising 4% and stocks rose in London with the FTSE 100 reaching a 14-year high in morning trade.

The conflict will be at the top of the agenda at the Nato summit in Wales

The news came as Russia announced it was to hold major military exercises in September of the forces responsible for its long-range nuclear capability. The drills will involve more than 4,000 servicemen and 400 technical units. 

Meanwhile, world leaders have begun arriving in the UK ahead of a two-day Nato summit in Wales where the Ukraine crisis will be at the top of the agenda. 

Mr Putin and Mr Poroshenko met last week in Minsk but made no progress towards resolving the conflict, which has intensified in recent weeks as the West and Kiev accused Russia of deploying troops in Ukraine.

Foreign Secretary Philip Hammond recently warned that Nato must show it still has the political will to fight back in the event of a Russian attack on any member states.

Mr Hammond said: "For Nato to maintain its credibility in the future, we have to demonstrate that we maintain the political will to act to defend ourselves and our interests.

"We have to be clear that we have not lost the appetite to intervene when our interests or our obligations require us to do so."

Despite the claims, Russia has repeatedly denied its soldiers were sent into eastern Ukraine.

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