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Kiev: Russian troops are pulling back from Ukraine’s border, according to state television in Moscow, as Prime Minister Dmitry Medvedev warned the US and the European Union they risked provoking a new Cold War.

Soldiers in three Russian regions bordering Ukraine have started to return to their bases after receiving an order from defense minister Sergei Shoigu, Russian state TV reported on Tuesday. Soldiers are packing and deciding on routes to come back to their permanent bases, state TV said. NATO and the US haven’t confirmed the pullback.

After annexing Crimea in March, Russia has been accused by the government in Kiev and its US and EU allies of fomenting unrest in the mostly Russian-speaking east of Ukraine. President Vladimir Putin has in recent days welcomed contacts between the Kiev authorities and supporters of a decentralization of powers to the regions.

Russia has talked troop withdrawals before so there’s a lot of posturing and we’ll have to wait several days to see if it’s for real, Joerg Forbrig, senior program officer for central and eastern Europe at the Berlin bureau of the German Marshall Fund of the US, said by phone. A lot of these troops don’t even have permanent bases in the area.

No evidence

North Atlantic Treaty Organization (NATO) secretary general Anders Fogh Rasmussen said on Monday he’s seen no evidence of a withdrawal and this was the third time Putin has made such an announcement. A Pentagon spokesman also said on Monday there was no sign of a pullback. NATO says Russia has about 40,000 troops on Ukraine’s border.

The Micex Index rose 0.1% to 1,415.07 by 1:42 pm in Moscow after climbing as much as 0.8%. OAO Gazprom sank 1.4% to 145.95 rubles per share after gaining 17.5% in its longest rally since at least January 2006, when it started trading on the Moscow Exchange.

The ruble gained for a third day, heading for the strongest close in 3 1/2 months, on speculation tension in Ukraine will cool. The currency advanced less than 0.1% to 40.3580 against the central bank’s dollar-euro basket.

Russia is being pulled into a standoff with the US and its allies, who are using economic warfare, Medvedev said on Monday in an interview with Bloomberg Television at his residence outside Moscow.

Russian retaliation

Russia has prepared retaliatory steps in response to possible wider US and EU sanctions, Medvedev said. While he didn’t give details of Russia’s potential steps, he described the punitive measures as a double-edged sword.

We are slowly but surely moving toward a second Cold War, which no one needs, Medvedev said. We haven’t especially commented on sanctions or responded to them harshly, although we could do something unpleasant or offensive to those countries that are introducing these sanctions. He blamed President Barack Obama, his one-time partner in a reset of relations, for a lack of political tact.

Medvedev also refused to guarantee that Russia won’t incorporate the Ukrainian regions of Donetsk and Luhansk, which voted to break away in disputed referendums this month, saying that the US and the EU must pledge not to interfere in Ukraine and push it into NATO.

We don’t have to guarantee anything to anyone because we never undertook any obligations on this matter, Medvedev said. The most important task is to calm down the situation in Ukraine.

German partner

German Chancellor Angela Merkel said on Tuesday that forging closer EU-Ukraine ties through an association treaty in no way was directed against Russia.

On the contrary — for us Germans, Russia is a close partner, Merkel said in a Leipziger Volkszeitung newspaper interview. The Russian president himself speaks often of an economic zone from Lisbon to Vladivostok, for which there certainly are many good arguments.

Ukraine’s richest businessman, Rinat Akhmetov, criticized separatist supporters of the self-proclaimed Donetsk People’s Republic and called for protests today, according to a statement on his System Capital Management company website.

Cities are witnessing banditry and looting by armed rebels in Donetsk, he said. People are tired of living in fear and terror.

Ukrainian forces continued to clash with pro-Russian insurgents in the Donetsk and Luhansk regions, where pro-Russian groups have set up self-proclaimed administrations.

Rebel attacks

A group of gunmen attacked the state ammonia transport company Transammiak in the Donetsk region, stealing several cars and computers. It follows attacks this week on power plants supplying electricity to metals factories in Ukraine’s eastern industrial heartland.

The defense ministry in Kiev said on Monday that one separatist was killed when a group of about 50 attacked soldiers near a border checkpoint. Interior ministry officials said there are about 900 rebel fighters in the east, and 50 have been detained.

Putin called on Ukraine’s government to immediately halt its punitive operation against pro-Russian rebels.

NATO’s chief blamed Russia for unrest in Ukraine’s east.

Russia’s role

What we have seen in Ukraine is outrageous, Rasmussen told reporters on Monday in Brussels. We have seen illegal Russian military actions in Crimea. We have seen an illegal annexation of Crimea. There is no doubt that Russia is deeply involved in the destabilization of the situation in eastern Ukraine.

Ukrainian Prime Minister Arseniy Yatsenyuk said the government will try to ensure the 25 May presidential election goes ahead throughout the country. We realize that in certain places it will be difficult to conduct voting, he said. But there are very few such places, and this will not affect the election results.

In Donetsk and Luhansk, most polling stations haven’t received official voter lists, Andriy Mahera, the deputy head of the Electoral Commission, said in an interview. Threats against members of election commissions have increased in both regions, said the Washington-based National Democratic Institute, which is sending election observers.

Chocolate billionaire Petro Poroshenko is set to win the vote, according to opinion polls. BLOOMBERG

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