Putin unveils Ukraine peace plan ahead of NATO summit

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NATO leaders aim today to show unity against Russia over the conflict in Ukraine after President Vladimir Putin unveiled a broad peace plan.

The Russian president's surprise announcement could take the wind out of the sails of a high-stakes NATO summit in Wales, where Western leaders led by US President Barack Obama plan to step up their defence of eastern Europe in the face of Russian 'aggression'.

Putin appealed for both sides to lay down their weapons after nearly five months of fighting that has killed 2,600 people and been blamed by both Kiev and its Western allies on Putin's attempts to seize back former Soviet and tsarist lands.

The sudden glimmer of hope for an imminent end to Europe's worst crisis in at least two decades saw stocks in European markets rise and the Russian ruble rebound.

But there were early signs that the blueprint -- which Ukrainian President Petro Poroshenko said was agreed during telephone talks between the two leaders -- lacked universal support.

Ukrainian Prime Minister Arseniy Yatsenyuk said Putin's proposal was meant to 'pull the wool over the eyes of the international community'.

And Obama responded cautiously during a highly symbolic visit to former Soviet republic and new NATO member Estonia -- one of many eastern European nations watching Putin's seeming efforts to seize back old holdings with growing concern.

"It's too early to tell what the ceasefire means," said Obama. "There is an opportunity here. Let's see if there is a follow-up."

The resurgent rebels may also take some convincing to lay down their weapons after scoring a resounding string of successes with the alleged support of Russian soldiers that has seen Ukrainian forces lose effective control over most of the separatist east.

"A ceasefire does not mean a peace agreement," Donetsk rebel leader Andrei Purgin told Russia's Interfax news agency.

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