(Bloomberg) — The U.S. ramped up warnings of a possible Russian attack on Ukraine, with President Joe Biden saying a “false-flag” event may be underway and a top diplomat describing Moscow as moving toward an “imminent invasion.”
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Russian officials said no invasion of Ukraine was underway and none was planned. But the Kremlin said in an official response to the Biden administration’s proposed security assurances that the offers were unsatisfactory and Russia might have to resort to unspecified “military-technical measures.”
Secretary of State Antony Blinken changed his travel plans Thursday to address the United Nations Security Council on the crisis. Russia expelled the U.S. deputy chief of mission in Moscow, Bart Gorman, in what a State Department spokesman called an unprovoked move.
At the UN, Blinken said that “diplomacy is the only responsible way to resolve this crisis,” and on Thursday night the State Department said Russian Foreign Minister Sergei Lavrov had agreed to meet Blinken in Europe next week.
“The Russians have responded with proposed dates for late next week, which we are accepting, provided there is no further Russian invasion of Ukraine,” Ned Price, a department spokesman, said in a statement. “If they do invade in the coming days, it will make clear they were never serious about diplomacy.”
And a White House official said Biden would speak with transatlantic leaders on Friday about the Russian troop buildup.
Amid the back-and-forth, the S&P 500 slumped about 2% and Treasuries rallied while gold topped $1,900 an ounce. Oil declined despite the threat of sanctions that could disrupt global supplies.
As Biden departed the White House for a speech in Cleveland, he told reporters that the probability of a Ukraine invasion is “very high” and that he expected an attack in the next several days.
“We have reason to believe they are engaged in a false-flag operation to have an excuse to go in,” he added, without elaborating.
A senior administration official declined to clarify Biden’s remarks. Earlier Thursday, Ukraine said that a kindergarten in a government-controlled town in the country’s east, near the line of contact between government and separatist forces, was struck by a mortar shell.
The Moscow-backed separatists claimed Ukrainian forces had violated the cease-fire in numerous places Thursday, including using mortars. Each side blamed the other for firing first and none of the claims could be immediately verified.
U.S. Ambassador to the UN Linda Thomas-Greenfield said “evidence on the ground is that Russia is moving toward an imminent invasion.”
The U.S. and NATO have said that Russia has massed as many as 150,000 troops near the border with Ukraine in preparation for a possible invasion, saying they see no evidence of a Russian pullback announced earlier this week.
Russia has dismissed the warnings as “hysteria” but is continuing its largest drills in years in neighboring Belarus that are due to finish on Feb. 20. It’s also conducting naval exercises in the Black Sea that are scheduled to end at the weekend.
The Kremlin has repeatedly denied it intends to invade Ukraine, though Russian President Vladimir Putin has demanded concessions from NATO while building up forces around the country, including tanks, artillery and other equipment.
Ukraine’s Ambassador to the U.S. Oksana Markarova said the country is “quietly” preparing for whatever may come. In an interview on Bloomberg Television, Markarova said her nation is ready to discuss how to achieve a lasting cease-fire in the country’s eastern region if “we do not cross the red lines.”
“We will never give up on our sovereignty, we will never give up on our territorial integrity, we will never give up on our Euro-Atlantic aspiration,” she said.
Russia’s Foreign Ministry handed over an 11-page document Thursday with its response to U.S. proposals delivered last month addressing Moscow’s demands for security guarantees. Putin has said NATO must promise to cease expansions, including refusing Ukraine membership in the alliance, and remove forces stationed in central and eastern Europe.
NATO has rejected his demands but offered talks on other security issues including missile restrictions and measures to build confidence, proposals Lavrov called “constructive” at a meeting with Putin on Monday.
(Updates with U.S. saying Lavrov agrees to talks, starting in fourth paragraph.)
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