John Kerry arrives in Ukraine with a $1B

Photo: The Canadian Press. All rights reserved.

Secretary of State John Kerry arrives in Kiev, Ukraine, Tuesday, March 4, 2014. Kerry flew to Kiev to show U.S. support for the fledgling Ukraine government. (AP Photo/Kevin Lamarque, Pool)

Secretary of State John Kerry flew to Kyiv Tuesday to show U.S. support for the fledgling Ukraine government, and the Obama administration announced with his arrival a $1 billion energy subsidy package. The fast-moving developments came as the United States readied economic sanctions amid worries that Moscow was ready to stretch its military reach further into the mainland of the former Soviet republic.

Kerry arrived as the Ukraine government grapples with a Russian military takeover of Crimea, a strategic, mostly pro-Russian region in the country's southeast, and as Russian President Vladimir Putin said he wouldn't be deterred by economic sanctions imposed punitively by the West.

While on the ground, Kerry was planning to pay homage to the dozens of protesters who were slain Feb. 20 in anti-government demonstrations which culminated days later in the ouster of President Viktor Yanukovych.

As Kerry arrived, the White House announced the package of energy aid, along with training for financial and election institutions and anti-corruption efforts. U.S. officials travelling with Kerry, speaking on grounds of anonymity, said the Obama administration is considering slapping Russia with unspecified economic sanctions as soon as this week.

Additionally, the officials said, the U.S. has suspended what was described as a narrow set of discussions with Russia over a bilateral trade investment treaty. It is also going to provide technical advice to the Ukraine government about its trade rights with Russia. The officials spoke on condition of anonymity because they were not authorized to be quoted by name before the official announcement was made.

Putin pulled his forces back from the Ukrainian border on Tuesday, yet said that Moscow reserves the right to use all means to protect Russians in the country. He accused the West of encouraging an "unconstitutional coup" in Ukraine and driving it onto anarchy, declaring that any sanctions the West places on Russia will backfire.

Speaking from his residence outside Moscow, Putin said he still considers Yanukovych to be Ukraine's leader and hopes Russia won't need to use force in predominantly Russian-speaking eastern Ukraine.

In Washington Tuesday morning, the White House said the $1 billion loan guarantee was aimed in particular at helping insulate Ukraine from reductions in energy subsidies. Russia provides a substantial portion of Ukraine's natural gas and U.S. officials said they were also prepared to work with officials in Kyiv to reduce their dependence on those imports. The White House said the assistance was meant to supplement a broader aid package from the International Monetary Fund, which currently has officials in Ukraine working with that country's new government.

On Monday, the Pentagon announced it was suspending military-to-military engagements between the United States and Russia, including exercises, bilateral meetings, port visits and conferences.

The 28-nation European Union on Monday threatened to halt long-running talks on visa liberalization and negotiations on further economic co-operation as a first step unless Russian troops on the Crimean peninsula retreat to their barracks by Thursday.