West urges Putin not to recognise Ukraine 'republics'

Such recognition would be a "clear violation of Ukraine's territorial integrity," the US ambassador to Nato, Julianne Smith, said in Brussels.

Russia said earlier Tuesday that it was pulling back some troops from the Ukrainian border in what amounted to the first sign of de-escalation in Europe's biggest security crisis since the Cold War.

Pressure for recognising the Ukrainian territories as independent countries came on Tuesday from the Duma, Putin's rubber-stamp parliament.

The Donetsk and Luhansk People's Republics (DPR and LPR) in Ukraine broke away in 2014 after Russia occupied that portion of east Ukraine in a covert military operation and supported puppet governments.

Recognising their sovereignty would enable Russia to station regular armed forces there under bilateral treaties, the same way it did in Abkhazia and South Ossetia in Georgia, resulting in a de facto Russian territorial expansion.

Speaking Tuesday, Putin doubled down on allegations that Ukrainians were guilty of war crimes in fighting DPR and LPR.

"What is happening today in Donbas [east Ukraine] is genocide," Putin claimed alongside Scholz in Moscow.

"If we ignore the Minsk agreement, and what was voted on today in the Russian parliament becomes reality, the [peace] process would end and that would be a disaster," said Scholz, who was referring to the so-called Minsk ceasefire accords on east Ukraine.

"We have noted this movement in the Duma and we need to watch this," Smith, the US Nato ambassador, said in Brussels.

Were the Russians to proceed with recognition of the self-styled republics, it would be "a clear violation of Ukraine's territorial integrity and its sovereignty and it's also a violation of the Minsk agreement that would obviously be a new shift in the escalation," she said.

The German chancellor welcomed Russia's reported troop pull-back as a "good sign," but Smith questioned Putin's intentions.

"We have to wait and see what action president Putin actually takes," she said. "We do not understand - fundamentally none of us do - what is inside president Putin's head, and so we cannot make any guess about where all of this is headed," she added.

Scholz reiterated Western threats to impose sanctions on Russia if it attacked Ukraine that also would impact a new Russian gas pipeline to Germany, Nord Stream 2.

Scholz also said Russia's treatment of Alexei Navalny, its best-known dissident, was "unacceptable", after Russia put Navalny on trial for a second time the same day Scholz came to Moscow.

But Putin appeared unfazed, rolling his eyes and smiling at the comments.

He also sought to catch Scholz off-guard by raising the fact that former German chancellor Gerhard Schröder — a social democrat like Scholz — now worked for Russian energy firm Gazprom as a lobbyist.

"If German citizens don't want to pay four or five times as much as they do for gas, they should be grateful to Mr Schröder", Putin said, while Scholz remained stony faced.

Russia has called on Ukraine to be permanently locked out of Nato membership.

Currently Ukraine is a Nato partner country and has been promised future membership if it meets certain standards.

But Scholz offered a far more ambiguous view in Moscow, saying: "Nato expansion is not really on the agenda. It is not a topic that will come up while we [Scholz and Putin] are in office".

The Estonian Foreign Intelligence Service, in its latest annual report out Tuesday, said the current crisis "shows how important Ukraine is in Russian foreign policy thinking."

"Without Ukraine, Russia's imperial ambitions fall apart. Russia is particularly perturbed by Ukraine's success in crafting a national identity," the report said.

The Ukraine crisis "demonstrates how the threat of military action has become the primary tool in Russia's foreign policy toolbox" and "Estonia must prepare for sustained military pressure from Russia," the Estonian analysis said.