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Russia threatens Ukraine after shell crosses border

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MOSCOW/KIEV, July 13 (Reuters) - Moscow threatened Kiev on Sunday with "irreversible consequences" after a man was killed by a shell fired across the border from Ukraine, describing the incident in warlike terms as aggression that must be met with a response.

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Although both sides have reported cross-border shootings in the past, the incident appears to be the first time Moscow has reported fatalities on its side of the border from the three-month conflict which has killed hundreds of people in Ukraine.

Ukraine denied its forces had fired across the border and suggested such an attack could have been the work of rebels trying to provoke Moscow into intervening on their behalf. The rebels denied they were responsible.

The bellicose rhetorical response from Moscow raises the renewed prospect of overt Russian intervention, after weeks in which President Vladimir Putin had appeared intent on disengaging, pulling back tens of thousands of troops he had massed at the frontier.

Russia sent Ukraine a note of protest describing the incident as "an aggressive act by the Ukrainian side against sovereign Russian territory and the citizens of the Russian Federation," the Russian Foreign Ministry said in a statement warning of "irreversible consequences".

"This represents a qualitative escalation of the danger to our citizens, now even on our own territory. Of course this naturally cannot pass without a response," Russian Deputy Foreign Minister Grigory Karasin told Rossiya-24 state TV.

"What has taken place once again reinforces the need for an urgent end to the bloodshed," he added, calling for talks between "the sides in the conflict", language Moscow uses to demand Kiev recognize the rebel leaders - many of them Russians who crossed the border to fight - as legitimate interlocutors.

Russia's Investigative Committee, a crime-fighting body answering directly to Putin, said it had launched a criminal case for murder after a shell landed in the yard of a house in a small town on the Russian side of the frontier, killing a man and wounding a woman.

The Russian town is called Donetsk, sharing the name of the Ukrainian city of 1 million people that the rebels have declared capital of an independent "people's republic".

"TOTAL NONSENSE"

Andriy Lysenko, spokesman for Ukraine's National Security and Defense Council, called the accusation that Kiev's forces had fired across the border "total nonsense", and suggested it might be the work of rebels trying to provoke Russia's response.

"The forces of the anti-terrorist operation do not fire on the territory of a neighboring country and they do not fire on residential areas," he said. "We have many examples of terrorists carrying out provocation shooting, including into Russian territory, and then accusing Ukrainian forces of it."

The rebels denied blame. Interfax news agency quoted the rebels' self-proclaimed first deputy prime minister, Andrey Prugin, as saying he was "90 percent certain" it was Ukrainian troops that had fired across the border.

"Our problem with heavy weapons is that we have a shortage of munitions, but the equipment is operated by highly skilled professionals. We have a choice, so our guys couldn't possibly miss so badly that a shot falls on Russian territory. For the Ukrainians it's the other way around: they have plenty of heavy weapons, no lack of them. So of course this was their shell."

The conflict in eastern Ukraine began in April when armed pro-Russian fighters seized towns and government buildings, weeks after Russia annexed Ukraine's Crimea peninsula in response to the overthrow of a pro-Moscow president in Kiev.

The fighting has escalated sharply in recent days after Ukrainian forces pushed the rebels out of their most heavily-fortified bastion, the town of Slaviansk.

Hundreds of rebels, led by a self-proclaimed defense minister from Moscow, have retreated to the Ukrainian city of Donetsk, built reinforcements and vowed to make a stand.

On Saturday, Ukrainian warplanes bombarded separatists along a broad front in the country's east in retaliation for a rocket attack that killed dozens of Ukrainian troops.

The city council of Ukraine's Donetsk said in a statement on its web site on Sunday that 12 people had been killed in firing on a mining settlement. It gave no details of who had fired.

Ukraine said three of its service members were killed in attacks on their posts on Sunday.

Western countries have threatened to impose harsh economic sanctions on Moscow if it intervenes openly in the conflict in its former Soviet neighbor. Russia denies fueling the conflict, but Kiev and Western countries say it has supported the rebels.

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