Putin Warns Ukraine as Safe-Passage Plans Descend Into Chaos

(Bloomberg) -- Ukraine's Volodymyr Zelenskiy held new talks with U.S. President Joe Biden after a deal to allow safe passage for civilians in two besieged southeastern cities appeared to collapse, with the government in Kyiv accusing Russian forces of violating the agreement.

Biden's “administration is surging security, humanitarian, and economic assistance to Ukraine and is working closely with Congress to secure additional funding,” he told Zelenskiy on Saturday evening, according to a White House statement.

The U.S. is working with Poland and in discussions with other NATO allies on a plan to have those countries supply warplanes to Ukraine for use against Russian forces, a White House spokesperson said.

Talks with Biden followed confusion over the proposed evacuation Saturday of non-combatants, and came after Russian President Vladimir Putin issued a fresh warning to Ukraine's democratically elected leadership.

Russian forces resumed shelling Volnovakha after the agreement of localized cease-fires, according to Ukrainian Deputy Prime Minister Iryna Vereshchuk. Fighting was also taking place along a route meant to serve as a humanitarian corridor to evacuate some 200,000 people from the nearby port city of Mariupol.

The International Committee of the Red Cross said safe passage operations from the cities would not begin Saturday, and the organization would continue dialog with the parties. There was no immediate comment from Russia.

Chaos surrounding plans for even a temporary halt in hostilities to allow the evacuation of civilians underscored the bitter nature of the war launched by Russia to remove Ukraine's leadership and install a pro-Kremlin government.

“We call on the international community -- states and international organizations -- to condemn Russia's gross violation of the agreements on the opening of humanitarian corridors,” the Ukrainian Foreign Ministry said.

Speaking in Moscow on Saturday morning, Putin had reiterated that Russia's key demand is the “demilitarization” of Ukraine, and issued a warning to Zelenskiy.

“The current leadership should understand that if they continue to do what they are doing, they will be putting the issue of Ukrainian statehood in question,” Putin said, according to Interfax. “And should that happen, this would be fully on their conscience.”

Russian forces have been accused by Ukraine, NATO and international agencies of indiscriminately targeting civilians since the invasion began Feb. 24, and of using cluster bombs and other weapons in breach of international law. Russia says it is hitting military targets with high precision.

Markets globally have been battered by the war in Europe, with stocks falling and commodities surging as the U.S., the European Union and others have enacted progressively more devastating rounds of sanctions on Russia.

Putin has signed a decree that would allow Russia and Russian companies to pay foreign creditors in rubles, an effort to stave off defaults while keeping capital controls in place. Russian corporate bonds denominated in foreign currencies have plunged to deeply distressed levels in recent days.

Visa Inc. and Mastercard Inc. said late Saturday they will suspend operations in Russia, a further step to isolate the nation's economy. The announcements came hours after Zelenskiy asked U.S. lawmakers to urge the companies to take action.

On the ground, Russian forces and their separatist allies in Donetsk have continued to advance on a broad front and taken control of a number of villages, a Russian Defense Ministry spokesman was cited by Interfax as saying. Ukraine said that its fighters were trying to push back Russian troops in Mykolaiv, a city of half a million people near Odesa.

Russia's invasion has prompted more than 1.2 million people to flee Ukraine, with many heading to the European Union across the Polish border.

Ukraine and Russia will potentially hold a third round of talks Monday, though Ukrainian Foreign Minister Dmytro Kuleba was downbeat on the prospects. Despite agreement in a prior round with Moscow on humanitarian corridors, they “are not available, because of the Russian fire and shells,” he said.

“I cannot say that there is any progress in it,” Kuleba said of the talks, as he met with U.S. Secretary of State Antony Blinken Saturday on the Polish-Ukraine border. “But every war ends with diplomacy, and with talks, so we have to continue talking, but we are not going to these talks to accept Russian ultimatums.”

In Moscow, Putin defended the invasion, saying it was a “tough decision” to make, and that Russian proposals for peace talks were known. “Our proposals are on the table with the group of negotiators in Kyiv,” Interfax cited him as saying. “We hope that they will respond positively to them.”