Europe Agrees On Fresh Russian Sanctions

European leaders have agreed to hit Russia with a fresh round of sanctions - despite Moscow signing up to a ceasefire in Ukraine.

The sanctions include credit restrictions on Russia companies, export bans, travel bans and asset freezes on a new set of officials, according to a European Union diplomat who spoke on condition of anonymity.

Two branches of the world's biggest oil producer - Gazprom Bank and Gazprom Neft - are targeted by the measures, said the diplomat.

Speaking at the end of a Nato summit in Wales on Friday, David Cameron said sanctions would continue despite both sides agreeing to the 12-point peace plan.

However, the Prime Minister said they could be lifted if a lasting peace was found.

The new restrictions, which will be imposed early next week, come as Britain agreed to supply 1,000 troops to a Nato rapid response force aimed at countering Russian aggression in Ukraine and Eastern Europe.

Nato Secretary General Anders Fogh Rasmussen revealed the plan for the Spearhead force after discussions with members in Newport.

Ukraine was a dominant topic on the final day of the Nato summit

"This decision sends a clear message: Nato protects all allies at all times," he said.

"And it sends a clear message to any potential aggressor: should you even think of attacking one ally, you will be facing the whole alliance."

Western leaders accuse Russia of sending thousands of troops into the east of Ukraine - prompting fears of future incursions into other Eastern European countries.

Mr Rasmussen said the Spearhead force would establish a command-and-control presence in the east of allied territories ready to deploy air, sea and special forces in the event of aggression.

He told Sky News Tonight: "We have decided to improve our ability to act swiftly. The force could be deployed within very few days if needed.

"The intention is to strengthen the defence of our allies."

Mr Rasmussen said alliance countries would contribute troops on a rotational basis to the high-readiness force.

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Lockdown To Combat Ebola In Sierra Leone

Sierra Leone will impose a four-day countrywide lockdown as part of efforts to halt the spread of the deadly ebola virus.

Ben Kargbo, a presidential adviser on the country's ebola task force, said citizens will not be allowed to leave their homes between September 18 and 21.

This will allow health workers to identify cases in the early stages of the illness which has killed more than 2,000 people since March.

Mr Kargbo told the Reuters news agency: "The aggressive approach is necessary to deal with the spread of ebola once and for all."

According to United Nations figures, Sierra Leone has recorded 491 of the total suspected, probable and confirmed deaths.

Mr Kargbo said 21,000 people would be recruited to enforce the lockdown.

Thousands of police and soldiers have already been deployed to enforce the quarantining of towns in the country's worst-hit areas near the border with Guinea.

But an aid worker in the capital, Freetown, told Sky News a lockdown alone is not enough.

A poster in Ivory Coast warns of the risk of ebola

Augustine Allieu, from Plan International, said improving education, hygiene and facilities are also necessary.

He said: "It's not absolutely the best option, but it is definitely one of those that needs to support all of these things that I have mentioned in terms of containing the spread."

Meanwhile, the World Health Organisation has said a vaccine for health workers could be available by November, with testing of two candidate vaccines under way.

An American doctor who came down with the virus while working in a Liberian maternity ward is "sick but stable", officials said on Friday.

There is currently no cure or vaccine for the virus

Rick Sacra, 51, has arrived at the Nebraska Medical Center where he is being treated.

UN Secretary-General Ban Ki-moon has set a goal of stopping the outbreak within six to nine months.

Mr Ban said the "next few weeks will be crucial" to step up international efforts and called on countries to contribute to a $600m (£367m) appeal for supplies to west Africa.

The UN has stepped up its campaign after the international medical group Medecins Sans Frontieres declared that the world was "losing the battle" to contain ebola.

Ebola is contracted through contact with an infected person's bodily fluids and there is currently no cure or vaccine.

Symptoms of the virus appear as a sudden onset of fever, headache, sore throat, intense weakness and muscle pain.

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Deep Divisions Amid Fragile Ukraine Peace

Ceasefire is a temporary state. It's not the same as lasting peace.

What has been agreed so far is a halt in the bloodshed - the reasons people took up arms in the first place have so far not been addressed.

The Ukrainian President sounds optimistic - a prisoner exchange could begin as soon as this weekend, a second Russian aid convoy could be allowed in.

People buy bread at a market in Mariupol after a ceasefire was signed

The self-proclaimed prime minister of the separatist Luhansk People's Republic is less encouraging.

He said the status of the people's republics had not been discussed, and the ceasefire should not be taken to mean they had abandoned their plans to separate from Ukraine.

The commander of one of the pro-Ukrainian battalions outside Mariupol said they would use the time to regroup and retrain.

The divisions run deep, and not just among the militia.

Plenty of people in the east did not support the winter revolution - from their perspective what they saw was their democratically elected president overthrown, and a government now in Kiev they believe seized power in a coup d'etat.

Some want more regional autonomy, others want their region to secede and join Russia.

On the other side are the pro-Ukrainians who fought for the future of their country on the Maidan, some of whom have now joined volunteer battalions in the east.

Rebel leaders say they have not abandoned their plans to break from Ukraine

They have already seen part of their country annexed by President Vladimir Putin, and believe the Russian army is fighting on the side of the rebels, intervening in their sovereign state.

They want their country to be united, to be allowed to move towards the European Union, and they want their land back.

Militarily we're back to relative stalemate - that in itself is quite a reversal of fortunes.

A couple of weeks ago it seemed the Ukrainian army was in the ascendant - the rebels seemed to be on the backfoot, retreating and largely restricted to the centres of Luhansk and Donetsk.

Over the course of the last fortnight, the rebels have had a sudden and mysterious resurgence - opening a new front in the south threatening the strategic port city of Mariupol, and simultaneously taking villages and towns to the east of the regional capital Donetsk.

Now it's the Ukrainian army losing ground, and the overall balance is roughly back to where it was.

A stalemate in eastern Ukraine would suit Russian President Vladimir Putin

Kiev says that's because Russia is sending troops and equipment across the border - not in sufficient quantities to look like an overt invasion and force the west to act, but enough to stop the rebels from being defeated.

The Kremlin insists any Russian soldiers in Ukraine are either on holiday or lost.

A return to stalemate would quite suit President Putin.

He doesn't necessarily need the rebels to win, and he doesn't seem to want to occupy, and have to defend, eastern Ukraine.

A frozen conflict, that could be thawed as and when necessary, could be just fine.

In terms of domestic Russian politics, President Putin doesn't want the Maidan revolution to be followed by success - his administration has long feared a colour revolution, in the manner of Ukraine or Georgia, fomenting outside the Kremlin walls in Moscow.

Much better that that revolution is synonymous in Russian minds with violence and chaos.

Russian state TV is pushing that narrative heavily at home.

In terms of broader geopolitics, the Kremlin doesn't want a united Ukraine leaving its sphere of influence to join the EU, and maybe one day Nato.

They don't want to find Nato bases on their western border in five years' time.

Keeping a level of control of the east, and an insurgency that has not been defeated, could give Moscow just the leverage it needs.

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Ukraine Ceasefire Holds With Pro-Russian Rebels

Deep Divisions Amid Fragile Ukraine Peace

Updated: 12:27pm UK, Saturday 06 September 2014

By Katie Stallard, Moscow Correspondent in Mariupol

Ceasefire is a temporary state. It's not the same as lasting peace.

What has been agreed so far is a halt in the bloodshed - the reasons people took up arms in the first place have so far not been addressed.

The Ukrainian President sounds optimistic - a prisoner exchange could begin as soon as this weekend, a second Russian aid convoy could be allowed in.

The self-proclaimed prime minister of the separatist Luhansk People's Republic is less encouraging.

He said the status of the people's republics had not been discussed, and the ceasefire should not be taken to mean they had abandoned their plans to separate from Ukraine.

The commander of one of the pro-Ukrainian battalions outside Mariupol said they would use the time to regroup and retrain.

The divisions run deep, and not just among the militia.

Plenty of people in the east did not support the winter revolution - from their perspective what they saw was their democratically elected president overthrown, and a government now in Kiev they believe seized power in a coup d'etat.

Some want more regional autonomy, others want their region to secede and join Russia.

On the other side are the pro-Ukrainians who fought for the future of their country on the Maidan, some of whom have now joined volunteer battalions in the east.

They have already seen part of their country annexed by President Vladimir Putin, and believe the Russian army is fighting on the side of the rebels, intervening in their sovereign state.

They want their country to be united, to be allowed to move towards the European Union, and they want their land back.

Militarily we're back to relative stalemate - that in itself is quite a reversal of fortunes.

A couple of weeks ago it seemed the Ukrainian army was in the ascendant - the rebels seemed to be on the backfoot, retreating and largely restricted to the centres of Luhansk and Donetsk.

Over the course of the last fortnight, the rebels have had a sudden and mysterious resurgence - opening a new front in the south threatening the strategic port city of Mariupol, and simultaneously taking villages and towns to the east of the regional capital Donetsk.

Now it's the Ukrainian army losing ground, and the overall balance is roughly back to where it was.

Kiev says that's because Russia is sending troops and equipment across the border - not in sufficient quantities to look like an overt invasion and force the west to act, but enough to stop the rebels from being defeated.

The Kremlin insists any Russian soldiers in Ukraine are either on holiday or lost.

A return to stalemate would quite suit President Putin.

He doesn't necessarily need the rebels to win, and he doesn't seem to want to occupy, and have to defend, eastern Ukraine.

A frozen conflict, that could be thawed as and when necessary, could be just fine.

In terms of domestic Russian politics, President Putin doesn't want the Maidan revolution to be followed by success - his administration has long feared a colour revolution, in the manner of Ukraine or Georgia, fomenting outside the Kremlin walls in Moscow.

Much better that that revolution is synonymous in Russian minds with violence and chaos.

Russian state TV is pushing that narrative heavily at home.

In terms of broader geopolitics, the Kremlin doesn't want a united Ukraine leaving its sphere of influence to join the EU, and maybe one day Nato.

They don't want to find Nato bases on their western border in five years' time.

Keeping a level of control of the east, and an insurgency that has not been defeated, could give Moscow just the leverage it needs.

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US Seeks 'Core Coalition' To Combat IS Threat

The US is forming a "core coalition" to battle Islamic State militants in Iraq, senior American officials have said.

US Secretary of State John Kerry and Defense Secretary Chuck Hagel called for support as they held talks with officials from 10 nations on the sidelines of a Nato summit on a strategy to defeat IS.

"We need to attack them in ways that prevent them from taking over territory, to bolster the Iraqi security forces and others in the region who are prepared to take them on, without committing troops of our own," Mr Kerry said.

"Obviously I think that's a red line for everybody here: no boots on the ground," he added.

Mr Kerry said he was aware that many nations would not want to do military strikes, but he said they could provide intelligence, equipment or weapons.

The talks were held with defence and foreign ministers of Britain, France, Germany, Canada, Australia, Turkey, Italy, Poland and Denmark.

"This group here this morning is the core coalition," Mr Hagel told them.

IS controls large areas of northern Iraq and Syria

"It is the core group that will form the larger and extended coalition that's going to be required to deal with this challenge."

The US has launched airstrikes in Iraq against the Sunni militants but is looking to expand its campaign after two videos showed the beheading of two American journalists held captive by the group, James Foley and Steven Sotloff.

The coaltion was announced as an Iraqi airstrike reportedly killed a senior aide of IS leader Abu Bakr al Baghdadi.

IS - also known as ISIS and ISIL - has gained control over vast swathes of Iraq and Syria. It controls the territory with a strict interpretation of Islamic law and has gone after religious minorities.

The US stressed the need for a comprehensive approach to the crisis in talks on Friday and acknowledged that action against IS in Iraq would have implications in Syria as well.

"We're convinced in the days ahead we have the ability to destroy ISIL. It may take a year, it may take two years, it may take three years," Mr Kerry said.

"But we're determined."

Washington is looking to have solid plans in place by the time the United Nations General Assembly meets in two weeks.

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Ireland: Bodies Of Two Children Found In House

Two children, believed to be nine-year-old twin boys, have been found dead in a house in the southern Irish county of Cork.

Soon after, the body of a man was found in a town about nine miles away. 

The bodies of the youngsters were discovered in a property in the town of Charleville, in the north of the county, shortly after 5pm on Thursday.

Reports from the town say a home has been sealed off in the Deerpark area of the town.

O'Rourke's Cross, the main route between Cork city and Limerick, has been closed to traffic as investigations get under way.

A second crime scene was later marked off when the body of a man, believed to be in his early 20s, was discovered in Buttevant, a town on the road between Charleville and the city of Cork.

Irish police said the two boys were pronounced dead at the house.

A police statement said: "The bodies remain at the scene and the area has been sealed off for technical examination, diversions are in place.

"The office of the State Pathologist has been notified and post mortems are expected to be carried out tomorrow on the bodies of the two children."

An appeal for witnesses to get in touch was issued.

Two checkpoints were set up on the main route into and out of the town as a large crowd gathered on the road outside the property, believed to be a family home.

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IS Leader's Top Aide 'Killed In Iraq Airstrike'

ISIS Leader Is Jihad's 'Rising Star'

Updated: 8:49am UK, Thursday 12 June 2014

Abu Bakr al-Baghdadi, commander of the Islamic State in Iraq and Syria (ISIS) controls large parts of eastern Syria and western Iraq.

But despite his power - and a $10m (£5.9m) US reward for information leading to his capture - little is known about a man who for his own survival has shunned the spotlight.

Fighters from ISIS and its rivals have praised Baghdadi as a strategist driven by an unbending determination to fight for and establish a hardline Islamic state.

He has succeeded in exploiting turmoil in Syria and Iraq's weak central authority after the US military withdrawal to carve out his powerbase.

He has also proved ruthless in eliminating opponents to further his ambition of creating an Islamist state.

According to the US reward notice, which depicts a round-faced, brown-eyed man with closely cropped beard and short dark hair, Baghdadi was born in the Iraqi town of Samarra in 1971.

He is said to be the only prominent al Qaeda leader not to pledge allegiance to Ayman al-Zawahiri after Osama bin Laden's death three years ago.

He split with Zawahri after falling out with al Qaeda's Nusra Front in Syria, whose leader Abu Mohammad al Golani rejected an edict to merge his forces under Baghdadi's command.

While Baghdadi's supporters believe an Islamic state would revive the glories of Islam, they say Zawahiri feared that by drawing jihadi fighters together in one place it would make it easier for the West to defeat them.

His fighters counter that Baghdadi has plenty of hidden surprises for his enemies.

"He has capabilities that he keeps secret until the right time," one ISIS supporter said.

Ignoring Zawahiri's calls to leave Syria to the Nusra Front, Baghdadi expanded operations across northern and eastern Syria in 2012 and 2013, sometimes battling Bashar al Assad's forces but more often pushing out other rebel fighters.

Baghdadi's fighters now control the city of Raqqa - Syria's only provincial capital completely beyond Assad's control - and have imposed strict Islamic law.

In neighbouring Deir al-Zor province ISIS has waged a six-week offensive against rival rebels in which 600 fighters have been killed, seizing oilfields and towns on the northeast bank of the Euphrates, 60 miles (100 km) from the Iraqi border.

There is also video evidence of ISIS in the Syrian town of Azaz, with territory they controlled marked by graffiti on the walls and a flying flag.

Video also appeared on a social media website in January purported to show the northern Syrian town of Manbij after it was captured from rival insurgents by fighters from ISIS.

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Hostage David Haines' Family Under Police Guard

The Croatian family of David Haines, the British hostage held by Islamic State, are receiving 24 hour police protection, Sky sources say.

Mr Haines, who has a wife and four-year-old daughter in Zagreb, was threatened with death in the recently released video of the beheading of US journalist Steven Sotloff.

The aid worker was taken from a refugee camp close to the Syrian border with Turkey in March 2013.

The 44-year-old has worked for aid agencies in some of the world's worst trouble spots, including Libya and South Sudan.

He also has a teenage daughter in Scotland from a previous marriage.

US Secretary of State John Kerry, meanwhile, announced the formation of a "core coalition" to tackle IS militants, who have seized control of much of northern Iraq and Syria. 

Speaking at the Nato summit in Newport, he urged the United Kingdom, France and Australia, as well as other nations, to provide the air power, intelligence, weapons and equipment to go after the group inside Iraq.

And Iraqi officials said an airstrike had killed a senior aide of IS leader Abu Bakr al Baghdadi. 

Steven Sotloff was the second US journalist beheaded in an IS video

Prime Minister David Cameron on Thursday ruled out paying a ransom to the militants for Mr Haines' release, describing such payments as "utterly self-defeating".

He acknowledged it was a "desperately difficult situation" and said he was personally overseeing efforts to bring the aid worker home safely.

Mr Haines' Croatian wife earlier told The Daily Telegraph: "He's everything to us. He's our life. He's a fantastic man and father.

"Nobody can understand how we are feeling. My daughter keeps asking about him every day. She hasn't seen her father for a year and a half. She has gone through so much. She sees me crying all the time," Dragana Prodanovic Haines said at the family's home near Zagreb.

Muslim religious leaders across Scotland are using Friday prayers to call for the release of all hostages held by IS.

A joint statement from the Muslim Council of Scotland, Islamic Society of Britain and Glasgow Central Mosque, said: "We send our heartfelt sympathies to the families of those who have been killed at the murderous hands of IS - regardless of where they are from or what their religion.

"The actions of IS are against the teachings of Islam and therefore supporting or joining such an organisation is unacceptable.

"We call for the immediate release of all hostages held by IS and pray for all of those killed, injured or harmed by extremism the world over."

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ECB Cuts Eurozone Rates And Boosts Stimulus

The European Central Bank (ECB) has taken further action to boost bank lending and spur activity in the stagnating eurozone.

A series of rate cuts had an immediate impact with the value of the euro plunging against core currencies including the dollar and the pound - hitting its lowest level against the greenback since July 2013.

The ECB trimmed its benchmark interest rate to 0.05% from a previous record low of 0.15% and also raised its charge on banks to park money with it - the deposit rate doubling to -0.2% - in a bid to encourage banks to lend rather than hoard money.

Then, at his news conference 45 minutes later, ECB president Mario Draghi also confirmed the governing council had decided to start unconventional monetary policy though it stopped short of quantitative easing, despite pressure from some members for a more aggressive response.

He said the ECB would start purchasing asset-backed securities and covered bonds in October - a scheme he described as credit easing.

The moves are a response to a weakening of the eurozone's economic recovery - the most recent figures confirming zero growth across the euro area as a whole, with Germany's GDP actually contracting in the second quarter.

Analysts suggested the rate moves would make the ECB's upcoming four-year loan offer, or TLTRO, more attractive as banks can now get the funds for less.

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Ukraine Troops In Call For Better Arms

By Yulia Bragina, Russia Producer, In Eastern Ukraine

On the highway between Donetsk and Mariupol in eastern Ukraine near the village of Volnovakha, there stood a military transporter with an old, self-propelled artillery gun and tired-looking men perched on it.

Having spent several hours trying to find the Ukrainian military, the Sky News team decided to pull over and speak to them.

They told us they got separated from the column when the engine of their transporter got overheated - again - as they were making their way from a mission near the town of Starobesheve.

Trench dug by Ukrainian soldiers outside Mariupol

The soldiers asked our team to tell the checkpoint on the outskirts of Mariupol that they had broken down because they had no other way of informing their commander.

"We are too close to the rebel-held territory here. If we don't get help quickly, we will not survive the night," said Artyom, 22.

The men told us they had earlier engaged with a Russian military convoy closer to the border.

A member of the Azov battalion stands guard at their base in Mariupol

"The APCs (armoured personnel carriers) that we were fighting against had a parachute painted in the front. That's a symbol of Russian paratroopers," said Artyom.

"They are not even hiding anymore. I have seen with my own eyes the Russian military convoy crossing from Russia into Ukraine on August 18, but no one believes us."

A few kilometres away we met another Ukrainian military vehicle on its way to the front line, and one of the officers agreed to talk to us anonymously.

Soldiers like Roman say there is a lack of basic equipment

Petro (not his real name) said he was 28, had a wife and three children and had been serving in the Ukrainian army for nine years.

He was angry with the policies of the government in Kiev which he regarded as too indecisive, and warned that if it continued the army would turn and march on the capital.

Petro criticised Western politicians for not supporting Ukraine with positive action. What they needed, he said, was modern equipment and arms, not words.

Roman shows off the sneakers supplied by a family member

"We have many patriots who want to defend their country, but people are just scared to fight with tanks and APCs that are 30 to 40 years old," he said.

His call was echoed by members of the volunteer Azov battalion on the outskirts of Mariupol like 27-year-old Roman.

Roman, a veteran of nine firefights, said the sneakers he was wearing had been sent to him by his brother who lives in Florida.

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PM: UK Will Not Pay For British IS Hostage

Nato Plans 'Spearhead' Force To Face Russia

Updated: 12:53pm UK, Tuesday 02 September 2014

Nato is set to create a high-readiness force and stockpile military equipment in Eastern Europe as a bulwark against potential Russian aggression, the alliance's chief has said.

Secretary General Anders Fogh Rasmussen said the proposed new force could be comprised of several thousand troops contributed to on a rotating basis by the 28 Nato countries.

Backed by air and naval assets, he said the unit would be a spearhead that could be deployed at very short notice to help Nato members defend themselves against any threat, including from Russia.

Nato leaders are to consider the plans at a summit this week in Wales that is likely to be dominated by how the US-led alliance should respond to the Russian-backed separatist uprising in eastern Ukraine.

Ukraine is not a member of Nato, but its UK ambassador told Sky News he backed the move and appealed for Ukraine's allies to step up sanctions and provide military help now.

Andrii Kuzmenko said: "What is important for Ukraine is to provide the means for our defence ... including armaments."

The move could provoke Russia, whose foreign minister warned on Monday that Ukrainian forces must pull back from areas where they can harm civilians.

Sergei Lavrov spoke amid reports that Ukrainian forces had been ordered to pull back from Luhansk airport in the face of an onslaught from Russian tanks - the latest claim of direct Russian involvement in the fighting.

Ukrainian Defence Minister Valeriy Geletey said Russian units were moving into other towns in the region, including the largest city of the Donetsk region.

"The information that Russian troops are there has been confirmed," he said.

"We are fighting Russia and it is Russia which is deciding what will happen in Donbass," he told Ukraine's Inter channel, referring to the informal name of the Donetsk and Lugansk regions.

Mr Lavrov again denied that Russian troops were in Ukraine and said he hoped talks taking place in the Belarussian capital Minsk would focus on agreeing an immediate, unconditional ceasefire.

Speaking in the east Siberian city of Yakutsk on Monday, Russian President Vladimir Putin accused Europe of ignoring the Ukrainian army "directly targeting its fire on residential areas".

He said he hoped "common sense will prevail" and that Russia and the West would not harm each other with further sanctions.

Speaking in the House of Commons, David Cameron said Russia appeared to be trying to force Ukraine "to give up its democratic choices at the barrel of a gun".

The PM said the presence of Russian soldiers on Ukrainian soil was "completely unjustified and unacceptable".

A rights group that works to expose Russian army abuses claims up to 15,000 soldiers have been sent to Ukraine by Moscow in the last two months, and several hundred may have died in combat.

Valentina Melnikova, head of the Committee of Soldiers' Mothers, a prominent organisation representing the families of military servicemen, said that some 7,000-8,000 Russian troops are believed to be in Ukraine at present.

"Military commanders are conducting a secret special operation," said Ms Melnikova, who is a member of the defence ministry's public council.

Meanwhile, a Ukrainian military spokesman said a rescue operation was continuing for two seamen missing in the Azov Sea after pro-Russian separatists attacked a Ukrainian navy vessel for the first time.

Eight other seamen survived the attack and were being treated for wounds and burns after the vessel was hit by artillery from the shore.

Separatists in the region claimed responsibility for the attack on social media.

Ukrainian President Petro Poroshenko said the events of the past few days showed Russia had launched a "direct and open aggression" against Ukraine.

Leading American senators have called for the US to send weapons to help Ukraine defend itself against what they called a "Russian invasion".

Democrat Robert Mendez, who runs the Senate Foreign Relations Committee, told CNN: "We should provide the Ukrainians with the type of defensive weapons that will impose a cost upon Putin for further aggression."

The call was echoed by former Republican presidential candidate John McCain, who told CBS's Face The Nation that Mr Putin was "an old KGB colonel that wants to restore the Russian empire".

Earlier, the European Union gave Russia a week to scale back its intervention in Ukraine, warning of further sanctions.

China opposes additional sanctions against Russia and has urged world leaders to find a political solution to the crisis.

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Nato Says 3,000 Russian Troops Are In Ukraine

Nato has told Sky News that 3,000 combat troops and hundreds of armoured vehicles are inside Ukraine.

"We are still seeing several thousand Russian combat troops on the ground inside Ukraine, equipped with hundreds of tanks and armoured vehicles, so (there is) no substantial change in the disposition of Russian forces inside Ukraine," the officer said.

Sky's Alistair Bunkall said: "A senior official told me there are now more than 3,000 Russian troops with tanks in eastern Ukraine. And in their words, they will soon outnumber the so-called rebels.

That sums up the task that is facing Nato. Russia has a very formidable military and taking them head on just isn't an option."

The officer, speaking on condition of anonymity, added that around 20,000 Russian troops remain close to the Ukraine border.

Earlier, Sky News filmed what appeared to be well-armed troops wearing recent issue Russian combat gear, operating alongside pro-Russian rebel forces in south-eastern Ukraine.

The men were travelling in a small convoy, which included an armoured personnel carrier and two machine gunners mounted on pick-up trucks.

Reporting from the city of Mariupol in southeast Ukraine, Sky's Katie Stallard said: "We can see smoke rising from the horizon and heard loud explosions that seem to be coming from two distinct directions.

"This is next to a village where we saw Ukrainian troops yesterday digging a second line of trenches and machine-gun positions.

"The soldiers posted on the outskirts of the city are on alert and are refusing to allow us out of the city. 

"We're hearing reports that people have seen a column of vehicles that were marked with the white and pink circles of the separatists. They believe it is a column of roughly 50 rebel vehicles heading west towards the city of Mariupol.

The development comes as Russia's Foreign Minister Sergei Lavrov accused the US of taking an anti-Russian stance at a time when a ceasefire deal was within reach.

"The surge in anti-Russian rhetoric that we have seen exactly when there is a very active effort to seek a political solution shows that the party of war in Kiev has active external support, in this case from the United States," Mr Lavrov told a news conference.

In contrast, he said, Russia was "doing and will do" everything in its power to secure peace in eastern Ukraine.

Ukraine's President Petro Poroshenko has said he will order a ceasefire at 1100 GMT on Friday for Ukraine forces, providing a document is signed in Minsk that sets out a stage-by-stage peace plan.

Meanwhile, David Cameron has opened the Nato summit declaring that Russian troops are illegally in Ukraine.

"We meet at a crucial time in the history of our alliance," he said. "The world faces many dangerous and evolving threats. Nato is as vital to our future as it has been in our past."

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Nato Summit: Ukraine Crisis To Top The Agenda

By Alistair Bunkall, Defence Correspondent

World leaders will begin arriving in the UK today ahead of the start of a two-day Nato summit in Wales tomorrow.

Some 61 heads of state are expected to gather at The Celtic Manor Resort outside Newport, with the ongoing conflict in Ukraine set to top the agenda of discussions.

Leaders will be joined by officials from the European Union, the UN, the International Monetary Fund and the World Bank.

A further 5,000 delegates are expected to gather to discuss the future of the Nato alliance.

Speaking at Downing Street ahead of the summit, David Cameron has condemned the ongoing violence in Ukraine, describing it as "disgraceful".

He told an audience of international delegates in London on Tuesday night: "What's happening in the Ukraine right now is disgraceful and completely unacceptable.

Mr Cameron has described the violence in Ukraine as "disgraceful"

"Members of Nato want and deserve real reassurance that our Article V commitments are rock solid."

He said he wanted the upcoming conference to demonstrate a "very clear, unified and strong message" about the importance of Nato globally.

Foreign Secretary Philip Hammond has also 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.

Western nations have repeatedly accused Russia of intervening militarily in the conflict in Ukraine. The claims have been denied by Moscow.

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.

Mr Obama will travel to Wales after a visit to the Baltic states today

"If we lack, or are perceived to lack, the political will to respond - and to do so quickly - the credibility of that commitment to collective defence will be undermined, and the very fabric of this, most successful of alliances, will unravel.

"So we have to be clear with Russia, in particular, that while we support a political resolution to the situation in eastern Ukraine, there is a red line around Nato member states themselves that cannot be crossed."

Nato Secretary General Anders Fogh Rasmussen says the alliance is set to create a high-readiness force in Eastern Europe as a bulwark against potential Russian aggression.

Mr Rasmussen said the unit would be a spearhead that could be deployed at very short notice to help Nato members defend themselves against any threat.

The murder of another US journalist by Islamic State militants will also feature in bilateral discussions between Western allies at the summit.

US President Barack Obama will head to Wales after a visit to the Baltic States.

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Sotloff Family Grieving After Hostage Killed

The family of US hostage Steven Sotloff have seen a video which purportedly shows him being beheaded by an Islamic State fighter, and are grieving privately.

Barak Barfi, a family spokesman, also said authorities have not established its authenticity.

He said: "The family knows of this horrific tragedy and is grieving privately. There will be no public comment from the family during this difficult time."

Mr Sotloff, 31, was a freelance journalist for Time and Foreign Policy magazines who went missing in Syria.

He was apparently killed by IS in revenge for US airstrikes on the Islamist militant group in Iraq.

Mr Sotloff has reportedly been killed by Islamic State

His reported death comes two weeks after the release of a video showing the killing of fellow US citizen James Foley and Mr Sotloff being threatened with death.

That led to Mr Sotloff's mother Shirley pleading for her son's life.

A friend of both hostages, Matthew Van Dyke, told Sky News it was time for the US to consider paying ransoms to secure the release of hostages.

IS had reportedly demanded £80m for Mr Foley's release.

But the US - unlike several European countries that have given millions to the terror group to spare their citizens - refused to pay.

Mr Van Dyke told Sky News he hoped the apparent killing was a "wake-up call to Americans", adding: "This is a serious threat".

Shirley Sotloff had pleaded for her son's life

He went on: "They are executing Americans and videotaping it and we need to do something about that. The US administration needs to get serious about the problem."

Mr Van Dyke said there were more Americans being held by IS and "we need to bring them home".

He said authorities should "re-examine the policy of paying ransoms for prisoner exchanges to at least get these people home and then take on IS and kill them before they get to spend the money."

Mr Van Dyke said the news of Mr Sotloff's reported death was "horrible", adding: "I've lost two friends in two weeks."

He said Mr Sotloff was a "brilliant journalist, hard working and dedicated".

"He knew the dangers but he knew the story needed to be told."

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IS Beheading: Militants Threaten Brit Hostage

Sotloff: Driven Reporter And Mideast Expert

Updated: 1:19pm UK, Wednesday 03 September 2014

Steven Sotloff, the US journalist who was beheaded by Islamic State militants, also held Israeli citizenship, Israel has revealed.

The information had been apparently withheld by Israel in a bid to reduce the risks to the captive.

"Cleared for publication: Steven Sotloff was #Israel citizen RIP," tweeted Paul Hirschson, a spokesman for the Foreign Ministry in Jerusalem.

Friends and colleagues described 31-year-old Mr Sotloff as an honest and courageous journalist who sought to understand the culture of the places he reported from and tell the stories of the people affected by conflict.

His work appeared in Time, Foreign Affairs and World Affairs magazines. He also contributed to some Israeli publications.

"We refused to acknowledge any relationship with him in case it was dangerous for him," said Avi Hoffman, editor of the Jerusalem Report magazine, which had published Mr Sotloff's work.

The Israeli newspaper Yedioth Ahronoth, quoting a former fellow captive, said Mr Sotloff had kept his Judaism a secret from the Islamist insurgents, pretending he was sick when he fasted for the Yom Kippur holiday.

Colleagues stressed that he understood the dangers of reporting in war zones, but remained committed to the task.

"Steven was very ethical, very driven, an exceptional journalist and an exceptional person," said Matthew Van Dyke, an activist and film-maker who met Mr Sotloff in Libya in 2012.

"He was also a cautious journalist, he did everything the right way," he told Sky News.

Mr Sotloff vanished in Syria in August 2013. His capture was kept secret for months at the request of his family, who said they were now grieving privately.

He then appeared in a video that showed the beheading of fellow US journalist James Foley last month.

A Miami native, Mr Sotloff attended the University of Central Florida, where he took an interest in journalism. He did not graduate from the university.

He covered the Arab Spring uprisings and several Middle East hotspots, including Yemen, Egypt and Libya. He learnt Arabic.

"He lived in the region for a time, he really got to know the people, the culture," said Mr Van Dyke.

"This was a region that was important to him, he wasn't somebody who jumped from conflict to conflict all over the world, he was a regional specialist and he knew what he was doing."

In his Facebook and Twitter profiles Mr Sotloff called himself a "stand-up philosopher from Miami" and often spoke of his love for baseball and the Miami Heat.

World Affairs, in an August 20 statement, described Mr Sotloff as "an honest and thoughtful journalist who strives to understand the story from local perspectives and report his findings straightforwardly."

The executive director of the New York-based Committee to Protect Journalists, Joel Simon, said: "Journalists know that covering war is inherently dangerous and that they could get killed in crossfire.

"But being butchered in front of camera simply for being a reporter is pure barbarism."

The group said at least 70 other journalists have been killed covering the conflict in Syria, including some who died over the border in Lebanon and Turkey, and that more than 80 had been kidnapped.

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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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Russia Warns Ukraine Troops To Pull Back

Ukrainian forces must pull back from areas of eastern Ukraine where they can harm civilian targets, Russia's foreign minister has warned.

Sergei Lavrov spoke amid reports of fierce fighting for Luhansk airport between Ukrainian troops and Russian tanks - the latest allegation of direct Russian involvement in the conflict.

Ukrainian forces have been ordered to pull back from the airport in the face of the onslaught, a military spokesman said.

Ukraine's Defence Minister Valeriy Geletey said that Russian units were moving into other towns in the region, including the largest city of the region Donetsk.

The attack on a Ukrainian vessel took place off the coast of Mariupol

"The information that Russian troops are there has been confirmed," he said.

"We are fighting Russia and it is Russia which is deciding what will happen in Donbass," he told Ukraine's Inter channel, referring to the informal name of the Donetsk and Lugansk regions.

Sergei Lavrov warned Ukraine to pull its forces back from areas in the east

Mr Lavrov again denied that Russian troops were in Ukraine and said he hoped talks taking place on Monday in the Belarussian capital Minsk today will focus on agreeing an immediate, unconditional ceasefire.

Speaking in the east Siberian city of Yakutsk on Monday, Russia's President Vladimir Putin accused Europe of ignoring the Ukrainian army "directly targeting its fire on residential areas".

He said he hoped "common sense will prevail" and that Russia and the West would not harm each other with further sanctions.

A rights group that works to expose Russian army abuses has claimed that up to 15,000 soldiers have been sent to Ukraine by Moscow in the last two months, and several hundred may have died in combat.

Valentina Melnikova, head of the Committee of Soldiers' Mothers, a prominent organisation representing the families of military servicemen, said that some 7,000-8,000 Russian troops are believed to be in Ukraine at present.

"Military commanders are conducting a secret special operation," said Melnikova, who is a member of the defence ministry's public council.

Satellite imagery reportedly shows Russian military vehicles inside Ukraine

Meanwhile, a Ukrainian military spokesman said a rescue operation was continuing for two seamen missing in the Azov Sea after pro-Russian separatists attacked a Ukrainian navy vessel for the first time.

Eight other seamen survived the attack and were being treated for wounds and burns after the vessel was hit by artillery from the shore.

Separatists in the region claimed responsibility for the attack on social media.

Writing on the site VKontake, former separatist military commander Igor Strelkov said: "The militia have dealt the enemy their first naval defeat."

Vladimir Putin's face has been used as a target at a Lviv shooting range

Although pro-Russian rebels have been fighting government forces since April, this is the first incident at sea.

Separatists have made significant gains in several towns close to the Azov Sea in recent days and are said to have set their sights on Mariupol. 

Ukraine's President Petro Poroshenko said the events of the past few days have shown that Russia has launched "a direct and open aggression" against Ukraine.

Leading American senators have called for the US to send weapons to help Ukraine defend itself against what they called "a Russian invasion".

Democrat Robert Mendez, who runs the Senate Foreign Relations Committee, told CNN: "We should provide the Ukrainians with the type of defensive weapons that will impose a cost upon Putin for further aggression."

The call was echoed by former Republican presidential candidate John McCain, who told CBS's Face the Nation that Mr Putin was "an old KGB colonel that wants to restore the Russian empire".

Earlier, the European Union gave Russia a week to scale back its intervention in Ukraine, warning of further sanctions.

China said it opposes additional sanctions against Russia and has urged world leaders to find a political solution to the crisis.

Mr Putin has consistently denied sending in troops, but has defiantly called for immediate talks on "statehood" for southern and eastern Ukraine.

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Captured IS Suicide Bomber Reveals Threat

By Stuart Ramsay, Chief Correspondent

A wing of Sulaymaniah's military hospital has been sealed off and 24-hour security has been posted at the door of a ward.

Inside lies an injured young man; a very special patient and prisoner.

He is 23-year-old Horr Jaffer, from Chechnya, and he is an Islamic State (IS) suicide bomber.

His capture has been a secret until now.

Sky News is the first to get access to this man who was caught in the southern Kurdish town of Jalula after his bomb part exploded.

He had been attempting to destroy a Kurd checkpoint by driving a bomb-laden car into their midst.

The 23-year-old militant killed four people in his bomb attack

Four people died and many others were injured, but he was captured attempting to escape.

Under questioning he admits that he joined IS in Syria after his father, mother and six family members were killed there.

He says they had moved from Chechnya to Pakistan before going to Syria.

The Kurds believe his father and brothers were to all intents and purposes professional jihadists; moving to countries where they could ply their trade. That trade is killing people.

"I want to be a martyr. I decided after they killed my family," he says in barely audible Russian.

"They didn't tell me anything about what I was doing or where I was. I just had to press the button."

The killer claims that Syria is filling with foreign fighters; a constant stream from all over the world.

"There are nations from all over the world there. There is British amongst them. They are from Asian countries, Europe and America. From everywhere," he told me.

He says that they used to talk together and mix together but didn't understand a lot of what was said.

Spending an hour with him it was striking how little he knew about what IS is doing across swathes of Syria. He denied any knowledge of the creation of a caliphate by IS for example.

He struck me as a rather stupid boy, upset by the loss of his family and totally open to indoctrination by his IS handlers.

He was just the guy prepared to die and kill others with him and it seems there are lots like him.

When asked if he regretted what had happened he broke down.

Britain is growing increasingly concerned about the threat from IS

Arching his back in pain and misery, saying he just wanted to live a normal life that he did not mean to do what he did.

It is hard not to be moved by his anguish. Hard but not impossible. He is a killer.

Like many western governments and security services, Britain is growing increasingly concerned about both IS and the numbers of young men being radicalised and coming to Syria and Iraq.

Out here the Kurds say they are right to be concerned.

"It is almost like super-terrorism and this is the frontline," Bafle Talabani, the British-born founder of the Kurds' elite Counter Terrorism Group, told me in the grounds of his father's house, which happens to be the Presidential Palace.

"It is more aggressive, more merciless more brutal. This is the front of the war on terror," he says.

"If we don't stop this here they will come for the West, for England, for Europe or the United States. They need to be stopped."

Bafle Talabani says IS represents a super-terrorism and needs to be stopped

IS, he believes, is the most dangerous single entity in the world today.

He is urging western governments to allow the Kurds to buy their own weapons or supply them.

"The special forces have good equipment. The peshmergas' weapons go back to the Iran-Iraq war. They are fighting against good weapons and a well-organised outfit with lots of money," he says.

With so many willing jihadists available IS is unlikely to miss this single bomber.

When he is treated and well, he will go to prison and rot there for the rest of his life.

He will be denied martyrdom. The Kurds want the foreign fighters to know that.

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Homeless Shooter Kills Two At Welfare Office

A homeless man suspected of shooting dead two people at a welfare office in New Zealand has been detained after a seven-hour manhunt.

A third person was seriously injured when a man opened fire inside the Work and Income New Zealand (WINZ) office in Ashburton before fleeing on a bike.

Police named the suspect as 48-year-old John Tully - who was interviewed by the local newspaper last month talking about his struggles with the benefit system and finding somewhere to live.

Tully is alleged to have entered WINZ at 10am (local time) wearing a black balaclava.

The shooting took place at 10am

Residents of the small town were warned to stay indoors before Tully was apprehended near a lake by a police dog unit at 5pm.

He was treated for minor dog bite injuries.

Superintendent Gary Knowles said: "Nothing will give the families that have lost their loved ones closure but the community can go to sleep tonight with the thought that the person who we believe may be responsible is in custody."

Police are still searching for the murder weapon - believed to be a sawn-off shotgun.

The manhunt lasted seven hours

The Ministry of Social Development confirmed all three victims worked for the agency but gave no further details.           

"We are all devastated by the deaths of two of our colleagues in the shocking attack," chief executive Brendan Boyle said.

Local media reported that both of the deceased were women.

The third victim was reported to be in a serious but stable condition in hospital.

In an interview last month, Tully told the Ashburton Guardian he previously worked in Australian mines but now lived in a tent after being unable to secure government-assisted accommodation.

Two people died and a third is in a serious condition after the shooting

He also wrote to the authorities about his struggles.

Lawmaker Winston Peters confirmed Tully emailed his political party on August 14 about the difficulty of finding a house.

"We replied immediately and also followed up," Mr Peters said. "However, the emails kept bouncing back."

New Zealand Prime Minister John Key offered his condolences to the victims and their families.

"There will be many questions to be asked and answered in the coming days about how this happened," said Mr Key.

"Every day New Zealanders get up in the morning to go to work, and their families expect them to return home. In this case that hasn't happened and my thoughts are with the loved ones."

Ashburton is home to about 18,000 people and is 90 kilometres (56 miles) southwest of Christchurch.

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Stormchasers Capture Supercell Over Iowa

Stormchasers have captured the moment a supercell hit a town in Iowa, causing widespread damage and leaving at least one person injured.

The giant wall of cloud and rain shut roads and knocked out power for hundreds of homes in the area around Denison.

Winds of up to 90mph caused significant damage in Dakota City, Nebraska, and Sergeant Bluff, Iowa, on Saturday and forced Interstate 29 to close when a roof was blown off a building and into a pickup truck, the Omaha World-Herald reported.

Severe thunderstorms across the northeastern US saw three men struck by lighting and flights delayed.

The men were injured at Orchard Beach, in New York's Bronx neighbourhood, on Sunday as storms hit the area. They were taken to hospital, but their condition is unknown.

Thunderstorms have also hit cities in the northeast

The National Weather Service said wind damage and flash flooding had hit East Orange, New Jersey, and Long Island.

Torrential rain, thunder and lightning affected the Labor Day weekend in Philadelphia, where the Made In America concert was evacuated for safety reasons.

The Electric Zoo music festival on an island in New York's East River was abandoned and play at the US Open was also halted in Queens.

More than 30 flights out of New York were affected, and storms also disrupted air travel in Philadelphia, Baltimore and Washington.

Cleveland's baseball game at Kansas City was also suspended due to heavy rain.

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China Rules Out Open Hong Kong Elections

Hong Kong: Democracy Promises Ring Hollow

Updated: 11:47am UK, Sunday 31 August 2014

By Mark Stone, Asia Correspondent

"How Hong Kong develops its democracy is completely within the sphere of the autonomy of Hong Kong. The central government [in Beijing] will not intervene." So said Lu Ping in 1993.

Mr Lu was the main representative of the Chinese delegation in the delicate negotiations for the handover of Hong Kong from Britain to China in 1997.

Today, for many, those words will feel deeply hollow.

At the heart of the 1997 "handover" was a pledge by China to honour the "one country, two systems" framework.

Under that agreement, known as the "Basic Law", Hong Kong would become part of Communist-ruled China but would be guaranteed autonomy to manage its own political, legal and social matters.

The Basic Law gave Hong Kong a "high degree of autonomy" and "executive, legislative and independent judicial power".

Crucially, the paper, endorsed by China, stated that the Chinese mainland's "socialist system and policies shall not be practiced" in Hong Kong.

"The previous capitalist system and way of life shall remain unchanged [in Hong Kong] for 50 years," it reads.

Until now, the territory's top political figure - the Chief Executive - has been chosen by a small election committee.

Today, Beijing has endorsed, for the first time ever, a proper framework for Hong Kong's first "direct" leadership election in 2017.

Good news you might think.

Given the wording in the Basic Law, which states explicitly that "universal suffrage" is the "ultimate aim" for Hong Kong, today's announcement from Beijing should have underlined the territory's political autonomy and allowed Hong Kongers to choose their leader with less, not more, interference from Beijing.

Yet the opposite has happened.

China's leaders have significantly tightened the threshold of eligibility for Chief Executive candidates.

You see, the 1997 "basic law" had small-print in it.

It states that Beijing has the final say over any interpretation or amendment of it.

And it appears the new leaders in Beijing are interpreting the paper differently from their predecessors and are amending it accordingly.

So, in the 2017 "election" (when the next Chief Executive will be chosen) Beijing has stipulated that each candidate must receive votes from half of a new "nomination committee" in order to be eligible to run.

Given that the nomination committee is made up of many pro-China loyalists placed there by Beijing, no democratic candidates will make it onto the ballot paper for the vote in 2017.

Beijing will successfully filter out any candidates it deems unacceptable.

We can expect protests and possible violence in the coming months.

The Occupy Central movement, which held a mass demonstration in July, has said it is prepared to bring the financial heart of Hong Kong Island to a standstill through a campaign of "mass civil disobedience".

Beijing has warned against "foreign interference".

A Foreign Ministry spokesman said it will not tolerate the use Hong Kong "as a bridgehead to subvert and infiltrate the mainland".

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EU Gives Russia Ultimatum Over Ukraine Crisis

Russia could be facing a fresh wave of EU sanctions within a week after Russian tanks reportedly attacked a town near the Ukrainian border city of Luhansk.

Ukrainian President Petro Poroshenko said tanks had been used to "destroy virtually every house" in the town of Novosvitlivka.

There were now thousands of foreign troops and hundreds of foreign tanks inside Ukraine, he told a news conference in Brussels, where EU leaders met to discuss the crisis.

"There is a very high risk not only for peace and stability for Ukraine but for the whole peace and stability of Europe," he said.

After meeting his European counterparts, Mr Poroshenko warned that efforts to end violence with pro-Russian rebels were close to a "point of no return" and that failure could lead to "full-scale war".

European leaders have ordered officials to make urgent preparations for a toughening of measures, likely to target senior Kremlin figures as well as the defence, energy and financial sectors.

Satellite imagery reportedly shows Russian military vehicles inside Ukraine

Prime Minister David Cameron said the EU summit had taken "important steps" and the European Commission would present firm proposals for tougher sanctions within a week.

"It is totally unacceptable that there are Russian soldiers on Ukrainian soil. We have now set out a timetable for further sanctions that could be ... significant steps," Mr Cameron said.

"It's a deeply serious situation and we have to show real resolve, real resilience in demonstrating to Russia that if she carries on in this way the relationship we have between Europe and Russia, Britain and Russia, America and Russia will be radically different in the future."

Outgoing EU Commission head Jose Manuel Barroso insisted it was not too late to find a political solution, but he added: "We are in a very serious, I would say, dramatic situation ... where we can reach the point of no return.

"If the escalation of the conflict continues, this point can come."

He added: "Russia should not underestimate the European Union's will and resolve to stand by its principles and values."

This image shows trucks and armoured vehicles near the Russia border

Meanwhile, Lithuanian President Dalia Grybauskaite called for a stepped up arms embargo on Russia.

She said: "It is the fact that Russia is in a war state against Ukraine. That means it is in a state of war against a country which would like to be closely integrated with the EU.

"Practically Russia is in a state of war against Europe."

It comes after a mutual exchange of captured soldiers between Ukraine and Russia on Sunday.

A group of 10 Russian paratroopers and 63 Ukrainian soldiers were returned after "very difficult negotiations", according to the Russian RIA news agency.

Russian President Vladimir Putin, in a TV show recorded on Friday, again denied that Moscow had sent troops to fight in Ukraine.

He said: "We need to immediately begin substantive talks... on questions of the political organisation of society and statehood in southeastern Ukraine with the goal of protecting the lawful interests of the people who live there."

He added that the West "should have known that Russia cannot stand aside when people are being shot at point-blank range".

Nato released images apparently showing Russian forces on the ground in eastern Ukraine.

Government sources said separatists are believed to have heavy weaponry supplied by President Vladimir Putin.

Included in the weaponry are 100 tanks and artillery pieces, anti-tank weapons and shoulder-mounted missile launchers, the sources said.

Russia has repeatedly dismissed accusations it has sent soldiers or equipment across the border.

President Barack Obama has said the satellite pictures made it "plain" that Russia had "deliberately and repeatedly violated the sovereignty and territorial integrity of Ukraine".

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Paris Flats Collapse: 10 Feared Under Rubble

A four-storey building has collapsed in an explosion in Paris, killing at least one child and leaving a dozen people unaccounted for.

Emergency services at the scene

A further 11 people were injured in the blast which rocked the residential complex in Rosny-sous-Bois, an eastern suburb of the French capital, on Sunday morning.

Fire spokesman Gabriel Plus said 10 people could still be beneath the rubble, and emergency teams were working hard to rescue people who might be trapped.

"We could still find living victims in the hours to come," he said.

Images of the blast showed it had ripped through virtually half of an adjacent apartment block, leaving what was left of the destroyed flats exposed.

Emergency services were called to the scene and French rescuers and firefighters are searching through the rubble for survivors and other possible victims.

A fire service spokesman said seven adults and five children were still missing.

"The search is ongoing for other possible victims in the rubble, and an alert for the mobilisation of significant medical resources has been made," he said.

The cause of the explosion is not yet known.

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Iceland Volcano Alert Amid Fresh Eruption

Iceland has raised an aviation alert for a region close to the subglacial Bardarbunga volcano after a small eruption in the area.

The small fissure took place in the Holuhraun lava field, about three miles north of the vast Dyngjujoekull glacier.

The country's meteorological agency described the eruption as a "very calm lava eruption and can hardly be seen on seismometers".

Authorities raised the aviation warning code to red in the region and closed the airspace around the eruption area up to 6,000 feet (1,823 metres).

Sunday's eruption is the third in eight days

No volcanic ash was detected and the Civil Protection Department said all airports remained open.

The eruption on Sunday at around 6am (EST) is the third to be registered in the area since August 23.

A similar fissure on Friday also prompted flights to be restricted in the area amid a warning to airlines by Icelandic authorities to be vigilant.

The Bardarbunga volcano lies under the Vatnajokull glacier, which dominates the eastern corner of Iceland.

More follows...

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