Moscow/Kiev: President Vladimir Putin ordered Russian troops near the Ukrainian border back to base, the Kremlin said, signalling a possible easing of tensions six days before Ukraine’s presidential election.

Putin ordered forces in the Rostov, Belgorod and Bryansk regions to return to their bases after completing exercises, according to the presidential press service. Putin, who discussed the situation in Ukraine with his security council on Monday, welcomed contacts last week between the government in Kiev and supporters of a decentralization of powers to the country’s regions, including the mainly Russian-speaking east.

The comments came as Ukrainian forces continued skirmishes with insurgents in the east after pro-Russian separatists in the Donetsk and Luhansk regions said they planned their own elections later this year. Putin, whom the Ukrainian government accuses of fomenting unrest in the east and who annexed Crimea from Ukraine in March, promised a withdrawal of Russian forces from the border two weeks ago.

The US and its European allies say he never fulfilled that pledge.

“There does appear to have been a moderation in tensions." Tim Ash, head of emerging-markets research at Standard Bank Plc in London, said in an email. “Both sides now are probably waiting to see the outcome of the presidential election next weekend and how this leaves the lay of the land."

Russia’s benchmark Micex Index of stocks was 1% higher at 2:49pm in Moscow. It’s risen 7.7% this month. The ruble rose 0.5% against the central bank’s target dollar-euro basket as investors pared bets Russia will intervene in Ukraine and trigger harsher sanctions from the US and the European Union. The yield on Ukraine’s dollar notes due 2017 fell 48 basis points to 11.97% at 12:50pm in Kiev, the lowest since 11 April on a closing basis.

A spokesman for Ukraine’s Border Service said it had seen a reduction in Russian activity on the frontier in the past week.

A return to base by Russian troops “would be a step toward de-escalation" if verified, German foreign ministry spokesman Martin Schaefer told a news briefing in Berlin.

The North Atlantic Treaty Organization says Putin has 40,000 troops on Ukraine’s border and has expressed concern that events in the eastern regions may be a precursor to a land grab similar to the annexation of Crimea.

Ukrainian Prime Minister Arseniy Yatsenyuk said on Monday the government will try to ensure the 25 May presidential election goes ahead throughout the country, though any difficulty holding it in some regions won’t affect the legitimacy of the poll.

“We realize that in certain places it will be difficult to conduct voting, but there are very few such places, and this will mot affect the election results," he said at a meeting in Kiev with officials from the Central Electoral Commission, the interior ministry and the Security Service.

“Special security arrangements will be imposed in the Donetsk and Luhansk regions, as well as other regions where we expect there will be attempts to disrupt the elections," acting interior minister Arsen Avakov said. “We will concentrate soldiers sent from calmer regions in the hottest spots."

Putin called on Ukraine’s government to immediately halt its punitive operation against pro-Russian rebels who have held referendums that they say justify their secession bid and set up their own administration.

Putin met the Security Council in the Black Sea city of Sochi on Monday before flying to China. With the Ukraine conflict increasingly alienating Putin from the US and the European Union, he’s seeking to complete an agreement on supplying natural gas to the world’s second-largest economy.

In the latest reported fighting, a soldier was killed and another wounded when rebels attacked a Ukrainian military outpost near Slovyansk, about 200km from the Russian border, from a position in a nearby kindergarten at 4:30am local time, the defence ministry said on its website.

Ukraine’s energy ministry said unidentified men attacked an electricity substation in the Luhansk region on Sunday, cutting power to the Stakhanov Ferroalloy plant.

The defence ministry also said government forces seized shoulder-fired anti-aircraft rockets from insurgents in Kramatorsk on Sunday night. A number of people who identified themselves as Russian journalists and were filming the insurgents were detained along with the rebels.

The deputy head of the Ukrainian Security Council, Viktoria Syumar, said on Facebook the journalists had provided information support to the rebels and were de facto members of terrorist groups.

A poll before the presidential election showed billionaire Petro Poroshenko, who owns a confectionery empire, in first place with 40%. Serhiy Tigipko was second with 9%, ahead of former prime minister Yulia Tymoshenko with 8.8%. The 6-8 May mobile phone survey by GfK Ukraine had a margin of error of 3.5 percentage points.

The separatists, who occupy buildings and broadcasting towers in about 15 cities, said they’d hold their own vote, possibly around 14 September, to elect new officials for their self- proclaimed Donetsk People’s Republic.

The US and the European Union imposed sanctions on Russian companies and people in Putin’s inner circle and vowed to tighten them if he disrupts the presidential election.

“There is a possibility that Russia will not face a third round of sanctions over the coming weeks given its attempts to ease tensions," Gillian Edgeworth, chief economist for eastern Europe, the Middle East and Asia at UniCredit Bank AG in London, said in an emailed note. “Over recent weeks, there was at times a risk that the election could not take place, but at this stage it is likely that in many parts of the country, the outcome should improve the legitimacy of governance in Ukraine." Bloomberg

Daria Marchak, Kateryna Choursina, Michael Winfrey and Arne Delfs contributed to the story.

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