* Russia tightens grip on Crimea
* G7 leaders hold emergency talks in the Netherlands
* Sanctions against Russia, G8 summit in Sochi on agenda
By Justyna Pawlak and Aleksandar Vasovic
THE HAGUE/FEODOSIA, Ukraine, March 24 (Reuters) - - U.S. President Barack Obama began crisis talks with his European allies on Monday after Ukraine announced the evacuation of its troops from Crimea, effectively yielding the region to Russian forces which stormed one of Kiev's last bases there.
Obama, who has imposed tougher sanctions on Moscow than European leaders over its seizure of the Black Sea peninsula, will seek support for his firm line at a meeting with other leaders of the G7 - a group of industrialised nations that excludes Russia, which joined in 1998 to form the G8.
Since the emergency one-hour G7 meeting was announced last week, Putin has signed laws completing Russia's annexation of the region.
In what has become the biggest East-West confrontation since the Cold War, the United States and the European Union have imposed visa bans and asset freezes on some of Putin's closest political and business allies. But they have held back so far from measures designed to hit Russia's wider economy.
"Europe and America are united in our support of the Ukrainian government and the Ukrainian people," Obama said after a meeting with Dutch Prime Minister Mark Rutte. "We're united in imposing a cost on Russia for its actions so far. Prime Minister Rutte rightly pointed out yesterday the growing sanctions would bring significant consequences to the Russian economy."
Moscow formally annexed Crimea on Mar. 21, five days after newly-installed pro-Moscow regional leaders held a referendum that yielded an overwhelming vote to join Russia. Kiev and the West have denounced the annexation as illegal.
Western officials are now focussed less on persuading Putin to relinquish Crimea - a goal that seems beyond reach - than on deterring him from seizing other parts of Ukraine.
"Our interest is not in seeing the situation escalate and devolve into hot conflict," White House national security adviser Susan Rice told reporters. "Our interest is in a diplomatic resolution, de-escalation, and obviously economic support for Ukraine, and to the extent that it continues to be necessary, further costs imposed on Russia for its actions."
In The Hague, leaders of the G7 - the United States, Japan, Canada, Germany, France, Britain and Italy - will discuss how to exert further pressure - and at what potential cost.
"It will be an opportunity for us to explain to each other what we are doing and where we are going, to coordinate our actions," a senior EU official said.
Persuading Europeans to sign on to tougher sanctions could be a challenge for Obama. The European Union does 10 times as much trade with Russia as the United States, and is the biggest customer for Russia oil and gas. The EU's 28 members include countries with widely varying relationships to Moscow.
"Europeans are committed to do something," said Jeffrey Mankoff, an analyst at the Center for Strategic International Studies. "I think it'll be difficult to convince them to go anywhere near where the United States would like to go."
So far, the seizure of Crimea has been largely bloodless, apart from one Ukrainian soldier and one pro-Moscow militia member killed in a shootout on Tuesday last week. Ukraine's troops left behind in Crimea have been besieged inside bases while offering little resistance.
Russian troops forced their way into a Ukrainian marine base in the port of Feodosia early on Monday, overrunning one of the last remaining symbols of resistance.
In Kiev, acting president Oleksander Turchinov told parliament the remaining Ukrainian troops and their families would be pulled out of the region in the face of "threats to the lives and health of our service personnel".
That effectively ends any Ukrainian resistance, less than a month since Putin announced that Moscow claimed the right to intervene militarily on its neighbour's territory.
Although Russian forces have not entered other parts of Ukraine, NATO says they have built up at the border. The Western military alliance also fears Putin may have designs on a part of another former Soviet republic, Moldova.
Despite the disruption to East-West relations, Washington wants other diplomatic business with Moscow to continue.
U.S. Secretary of State John Kerry is to hold talks later on Monday with Russian counterpart Sergei Lavrov, after meeting the head of the Organisation for the Prohibition of Chemical Weapons. The OPCW is overseeing the destruction of Syria's toxic stockpile in action sponsored jointly by Washington and Moscow.
"All I can say is I hope the same motivations that drove Russia to be a partner in this effort will still exist," Kerry said of the Syria disarmament programme.
Western governments are struggling to find a balance between putting pressure on Putin, protecting their own economies and avoiding triggering a vicious cycle of sanctions and reprisals.
Rutte, who is making his residence available to Obama and the other G7 leaders for the talks on the sidelines of a nuclear security summit, said the West might want to move slowly.
"Russia has an economy that is highly focused on oil and gas," Rutte told Reuters. "If it came to putting in place sanctions, that would hurt Russia considerably. So in my view we should do everything to prevent that."
U.S. officials say any further sanctions will need to be carefully calibrated to avoid bans on entire sectors, like oil or metals, that could reverberate through the global economy. Europe gets around one-third of its oil and gas from Russia.
British Foreign Secretary William Hague said in an article on Saturday, however, that Britain and its allies should consider imposing lasting limitations on arms sales to Russia, following the "outrageous" annexation of Crimea.
Diplomats said it was unlikely any detailed decisions about sanctions would be taken at the G7 meeting, due to start at 6.30 p.m. (1730 GMT), although the group is likely to send a message of support for Kiev, particularly for its economy.
The G7 leaders could also decide the future of the G8 - essentially the same group with Russia added as a member in 1998. Leaders have already suspended preparations for a G8 summit hosted by Putin in Olympic host city Sochi in June.
A French diplomatic source said the leaders will "discuss how this group can or cannot continue to function".
"There will certainly be a statement published at the end which will reflect the consensus on the evaluation of the situation and on how this group can respond to the situation created in Ukraine," the source said, on condition of anonymity.
Another EU diplomat said: "The G8 is dead, though I don't think anybody wants to say that.... The point that everybody will want to make is that we are all united." (Additional reporting by Fredrik Dahl in The Hague, Adrian Croft in Brussels, Thomas Escritt and Anthony Deutsch in Amsterdam, William James in London and Elizabeth Pineau in Paris, Gabriela Baczynska in Simferopol, Jeff Mason and Steve Holland in Washington, Natalia Zinets and Richard Balmforth in Kiev; Writing by Peter Graff; Editing by Paul Taylor)
BEFORE YOU GO
03/25/2014 6:18 PM EDT
Senate To Vote Thursday On Ukraine Aid
Senate Majority Leader Harry Reid (D-Nev.) set up a final vote Thursday on a bill that would provide Ukraine with up to $1 billion in loan guarantees and impose targeted sanctions against Russian officials.
Reid made the announcement Tuesday after dropping a controversial provision from the Senate bill that would have boosted the U.S. quota at the International Monetary Fund. Republicans in both chambers of Congress opposed the IMF reforms, which were specifically requested by the White House to increase Ukraine's borrowing capabilities at the institution.
Senate Minority Leader Mitch McConnell (R-Ky.) said earlier Tuesday that Republicans would still want to vote on a number of amendments, but the IMF language was the major sticking point. Without it, the Ukraine aid package is expected to pass both the Senate and the House without much drama or delay.
03/25/2014 5:24 PM EDT
Moldovan Separatists Claim They Downed Ukrainian Drone
Authorities in a pro-Russian separatist region of Moldova claim to have brought down a Ukrainian drone on a reconnaissance mission.
NovostiPMR, the news agency of Trans-Dniester says Tuesday that the region's intelligence agency downed the drone on March 23.
The region broke away from Moldova in 1990. There are 1,500 Russian troops stationed there guarding hundreds of tons of weapons.
According to the agency, the drone was "launched from Ukrainian territory by people close to the Ukrainian Security Service and the Defense Ministry."
It said the plane illegally crossed into Trans-Dniester violating its air space. It added that the authorities in the region reserved the right to use "all available methods" to defend the territory which is not internationally recognized but is supported by Russia.
03/25/2014 4:18 PM EDT
Russians Take Over Last Ukrainian Ship In Crimea
Russian forces appeared to be attempting to take over the last military ship controlled by Ukraine in Crimea on Tuesday after a Ukrainian military spokesman reported explosions in its vicinity and helicopters approaching the vessel.
Russian forces armed with stun grenades and automatic weapons have seized ships and military bases from the last remaining Ukrainian troops in Crimea in recent days as part of Russia's largely bloodless annexation of the region.
Kiev, which calls Russia's annexation of Crimea illegal, ordered its remaining forces to withdraw for their own safety on Monday, but not all troops have yet left the Black Sea peninsula and some ships have been prevented from leaving.
"Around 1900 (1600 GMT) there were several explosions from the direction of the minesweeper Cherkasy in the Donuzlav bay," Ukrainian military spokesman Vladislav Seleznyov told Reuters.
"Some Mi-35 helicopter gunships were observed hovering in the area. Speedboats and a tug were seen approaching Cherkasy," he said.
On Monday Cherkasy attempted without success to break to the open sea through a blockade at the entrance to the inlet. The Russian navy blocked the route earlier this month by scuttling three hulks in the channel.
Seleznyov said he was unable to confirm whether Russian troops had boarded the ship.
03/25/2014 3:02 PM EDT
Russian Military Holds Exercises In Moldova
Russia's military staged training exercises on Tuesday in Transdniestria, a breakaway sliver of Moldova that is a focus of tension following Russia's annexation of Ukraine's Crimea region.
NATO's top military commander said on Sunday he was worried that Russia might have its eye on Transdniestria, a largely Russian-speaking region that borders western Ukraine, after seizing Crimea, which has a narrow ethnic Russian majority.
The Interfax news agency quoted a spokesman for Russia's Western Military District, Colonel Oleg Kochetkov, as saying that Russian forces stationed in Transdniestria had "conducted an anti-terrorism drill and practiced operations to rebuff an attack on their military base".
Transdniestria, with a population of half a million, has run its own affairs since 1992 after fighting a brief war against the Moldovan government over fears that it might join Romania after the collapse of the Soviet Union, and Russia has a permanent garrison of peacekeepers there.
03/25/2014 1:02 PM EDT
No, Ukraine Will Not Have Nukes: Ministry Of Foreign Affairs
Ukraine's Ministry of Foreign Affairs confirmed, in something of a Shermanesque statement, that the country will not develop nuclear weapons, one day after the Russian Minister of Foreign Affairs seized on a proposal by some Ukrainian MPs to leave the Nuclear Nonproliferation Treaty.
"Ukraine has not planned, is not planning and is not going to plan to resume its nuclear status," a spokesman for the agency said at a press briefing.
Earlier this month, several opposition MPs introduced a draft bill to withdraw Ukraine from the NPT. Russia's Foreign Ministry seized on it, saying "the dysfunctional new Kiev authorities may pose a threat to the security of Ukrainian nuclear sites under the current Ukrainian circumstances," in a statement.
"We do not trust attempts of the Ukrainian delegate to dissociate from this position. The NPT is in serious danger."
Ukraine, which suddenly became the world's third-largest nuclear state after the collapse of the Soviet Union, gave its nuclear arsenal back to Russia for disposal under the 1994 Budapest Memorandum in exchange for security assurances from Russia that it would respect Ukraine's territorial integrity.
03/25/2014 12:34 PM EDT
Five Scenarios For Russia's Relations With China, Moldova And Nato
The world's industrialized nations have turned their back on Russia, following Moscow's annexation of Crimea.
Though the G8 cannot expel its members, countries can refuse a member permission to attend, effectively expelling them.
With jitters in the east of Europe about further Russian incursion, and wariness in China, the state of world diplomacy could look very different by 2015.
HuffPost UK has asked military and international relations experts on five scenarios that could occur now Russia looks increasingly isolated, and as the West looks impotent.
Read here what they predict.
03/25/2014 12:27 PM EDT
Senate Democrats Consider Dropping IMF Provision
Senate Majority Leader Harry Reid (D-Nev.) may drop a controversial reform to the U.S. share at the International Monetary Fund from the Ukraine aid package, according to Senate leadership aides.
The provision was requested by President Barack Obama and Ukrainian leaders, but faces widespread opposition from Republicans. Senate Majority Leader Mitch McConnell (R-Ky.) said Tuesday that his members would not support the aid bill unless the IMF language was dropped.
A Senate leadership aide said removing the provision is now "under consideration in order to move the bill." In exchange, Republicans would drop their demand to delay a Treasury Department rule that cracks down on the political activities of nonprofits, known as 501(c)(4)s.
The House of Representatives passed its own legislation providing aid to Ukraine earlier this month without the IMF reforms, and planned to move on a sanctions bill that also left the issue untouched. House Speaker John Boehner (R-Ohio) has said boosting U.S. funds at the IMF has "nothing to do with Ukraine," and his aides indicated they would not have enough votes to move the Senate bill through the lower chamber in its current form.
The Obama administration and Senate Democrats have been making the case that ratifying the IMF reforms, which were agreed upon in 2010, is critical to Ukraine's borrowing capabilities in a time of crisis. Still, some House Democrats acknowledged that the White House was complicating the process by renewing debate over a contentious issue when providing aid expeditiously is of the utmost importance.
03/25/2014 11:46 AM EDT
Obama Dismisses Romney's 'Geopolitical Foe' Comment
President Barack Obama dismissed the notion that former GOP presidential candidate Mitt Romney was correct in saying that Russia was "our number one geopolitical foe" Tuesday, in a response to a question from Jonathan Karl of ABC News. He said that Russia was merely a "regional power" that was acting out of "weakness."
"Russia is a regional power that is threatening some of its immediate neighbors, not out of strength, but out of weakness. Ukraine has been a country in which Russia had enormous influence for decades, since the breakup of the Soviet Union, and we have considerable influence on our neighbors," he said. "We generally don't need to invade them in order to have a strong cooperative relationship with them."
03/25/2014 11:26 AM EDT
Obama Says He's Not Interested In Putin's Motivation
At a press conference in Europe, U.S. President Barack Obama sidestepped a question on whether he "misread" Russian President Vladimir Putin, saying he wasn't so interested in his motivations.
"With respect to President Putin's motivation, I think there has been a lot of speculation. I am less interested in motivation and more interested in the facts and the principles that not only the United States but the entire international community are looking to uphold."
He added that the United States is "concerned" about further encroachment by Russia into Ukraine.
03/25/2014 10:39 AM EDT
Will Russia Annex Moldova Next?