Russian President Vladimir Putin said a NATO legion is fighting alongside Ukrainian government troops in eastern Ukraine and its aim was to contain Russia.

"Who is fighting (in eastern Ukraine)? There are official divisions of the armed forces but to a great extent there are so-called voluntary nationalist battalions. This is not even an army, it's a foreign legion. In this case it's a foreign NATO legion," Putin told students in the city of St Petersburg.

"(They are there) with the aim of geopolitically containing Russia," he said.
The Russian leader said NATO’s foreign legion "does not pursue the objective of serving Ukraine’s national interests. There are completely different goals there”.

"Unfortunately, official Kiev authorities are refusing to take the path of a peaceful settlement,” he added.

Putin also said that "many” Ukrainian men of draft age did not want to take up arms and sought to leave for Russia instead.

"They are seeking to move here, wait this out for some time,” Putin said. "And they are doing the right thing because they are simply being used there as cannon fodder.”

His remarks came as Russia blamed Kiev for a surge in fighting in Ukraine and warned the West that any attempt to increase economic pressure on Moscow would be "absolutely destructive" blackmail.

Pro-Moscow fighters have launched an offensive in southeastern Ukraine and President Barack Obama said Washington was considering all options short of military action to isolate Russia.

Kremlin spokesman Dmitry Peskov denied any Russian involvement in the fighting and Foreign Minister Sergei Lavrov accused the West of whipping up anti-Russian hysteria to justify extending economic sanctions against Moscow.

"Instead of increasing pressure on those who refuse to engage in dialogue to resolve the conflict peacefully, we see renewed talks about blackmailing Russia economically," RIA news agency quoted Peskov as saying.

"Russia has never agreed with such threats and such threats and blackmail have never led to anything and never will ... renewed threats of increased economic pressure on Russia are an absolutely destructive, unjustified and ultimately short-sighted approach."

Lavrov said the fighters in Ukraine were responding to attacks by government forces and the only way forward was through direct dialogue.

"We see attempts to derail the peace process and attempts again and again by the Kiev leadership to solve the problem by using force to suppress the southeast. These attempts lead nowhere," Lavrov told a news conference.

The European Union has called an emergency meeting of foreign ministers of its 28 member states forThursday.

"We expect our Western partners ... not to do anything that gives the Kiev authorities the impression that all their actions automatically will win support in the West," Lavrov said.

He accused the West of "chronic" finger-pointing at Moscow over the Ukraine conflict, in which more than 5,000 people have been killed in more than nine months of fighting.

Lavrov said it would have been naive to believe the pro-Russians would accept being shelled by government forces without responding.

He said the pro-independence fighters had started actions to "eliminate the positions from which the Ukrainian armed forces had shelled populated areas with heavy weapons".