Putin shakes hands with Poroshenko

2 presidents meet in Minsk for first time since June

Russian President Vladimir Putin and Ukrainian President Petro Poroshenko shook hands before they sat down for talks on Tuesday, meeting face to face for the first time since June to discuss the fighting that has engulfed Ukraine's separatist east.

Putin and Poroshenko were joined by Belarusian President Alexander Lukashenko, Kazakh President Nursultan Nazarbayev and three senior officials from the European Union in the Belarusian capital of Minsk.

Putin and Poroshenko exchanged a firm handshake before heading into the talks.

"The fate of my country and Europe is being decided here in Minsk today. The interests of Donbass (in eastern Ukraine) have been and will be taken into account," Poroshenko said as the talks began.

He was expected to face pressure to find a negotiated settlement - not a military victory - to the fighting, which began in April between rebels and government troops. That was the option called for by German Chancellor Angela Merkel in a visit to Kiev last weekend.

Putin said the crisis in Ukraine could not be solved by a further military escalation or without dialogue with representatives of the country's Russian-speaking eastern regions.

He also said the Russian economy could suffer a loss of about 100 billion rubles ($2.77 billion) if European goods reach the Russian market via Ukraine after Kiev signed a trade pact with European Union.

Opening Tuesday's meeting, Belarusian leader Lukashenko urged both sides to "discard political ambitions and not to seek political dividends".

A seating chart released by Moscow indicates the talks will take place at a huge oval table, with Putin separated from Poroshenko by Kazakh leader Nazarbayev and his aides.

A Kremlin official in Minsk said on condition of anonymity that a meeting involving EU officials will determine whether a sensitive one-on-one between Putin and Poroshenko would take place.

The talks came as Ukraine said its forces had captured 10 Russian soldiers in eastern Ukraine and the shelling spread to a new front in the far southeast. Ukraine has repeatedly accused Russia of supporting and arming the rebels, which Russia denies daily.

Ukraine wants the rebels to hand back the territory they have captured in eastern Ukraine, while Putin wants to retain some sort of leverage over the mostly Russian-speaking region so Ukraine does not join NATO or the European Union.

The Facebook page for Ukraine's anti-rebel operation claimed soldiers from a Russian paratrooper division were captured Monday around Amvrosiivka, a town near the Russian border. A Russian Defense Ministry source, quoted by RIA Novosti, said the servicemen had strayed into Ukrainian territory by mistake during a border patrol.

Towering columns of smoke rose on Tuesday from outside a city in Ukraine's far southeast after what residents said was a heavy artillery barrage. Ukraine accused separatists and their alleged Russian backers of trying to expand the conflict.

It was the second straight day that attacks were reported in Novoazovsk, which is in eastern Ukraine's separatist Donetsk region but previously had seen little fighting.

Local residents, some hastily packing up to flee, said it was not clear what direction the firing had come from.

Ukrainian officials on Monday claimed artillery was fired from the Russian side of the border. A Ukrainian soldier who declined to give his name suggested that Tuesday's shelling could have come from rebels aiming to take out a Ukrainian rocket launcher.

AP-Reuters-AFP