MINSK (AFP) - Ukranian and rebel envoys resumed intense talks on Wednesday aimed at ending a pro-Russian uprising that has left the former Soviet republic in ruins and upset East-West ties.
A successful round of preliminary negotiations in the Belarussian capital Minsk would pave the way for a second meeting on Friday at which a final agreement is signed.
But sharply contrasting visions of Ukraine's place in Europe and its system of government threaten to block a solution to the eight-month war.
The industrial east's pro-Russian militias rose up against the historic shift toward Europe that Kiev made in the wake of last winter's ouster of an unpopular Moscow-backed president.
Separatist commanders in Lugansk and Donetsk have since declared their own republics and will settle for no less than Ukraine becoming a loose federation in which they manage most of their own affairs.
This solution is backed firmly by Russia but rejected by Ukrainian nationalists who make up an important part of President Petro Poroshenko's government.
Ukraine has remained tightly centralised since independence and is only now considering easing its hold over the country's regions in order to stem public resentment over the relative prosperity enjoyed in Kiev.
Such problems helped undermine two deals reached in Minsk in September that Poroshenko was forced into following a surprise rebel counteroffensive that Nato believes was backed by crack Russian forces and tanks.
Russian President Vladimir Putin flatly calls soldiers who crossed into the Ukrainian war zone volunteers who are "answering the call of the heart".
A UN count puts the number of deaths following an initial Sept 5 truce deal at more than 1,300.
The overall toll since last winter from Europe's bloodiest conflict since the 1990s is more than 4,700 and has caused friction between many of the country's Ukrainian and Russian speakers that may take generations to heal.
MONEY AT STAKE
Wednesday's meeting includes mediators from Russia and the Organization for Security and Co-operation in Europe (OSCE).
The most important immediate issue for the rebels will be to make sure that Kiev resumes the social payments it suspended last month in fear they were being used to fund the revolt.
Russia's Kiev ambassador Mikhail Zurabov - Moscow's envoy at the talks who defends the insurgents' stance - said "economic" issues were one of the four main points on the agenda.
But a Kiev-based OSCE representative who will also attend Wednesday's meeting said the sides will discuss humanitarian aid deliveries, but steer clear of the payments debate.
The OSCE's Heidi Tagliavini added that also up for debate were the details of a mutual troop withdrawal and a prisoner swap.
Separatist negotiators sounded pessimistic about the initial talks' outcome as they headed to Minsk on Tuesday night.
"So far, I see no grounds to believe we will reach any consensus," Lugansk rebel leader Igor Plotnitsky said.
But Poroshenko's top foreign policy adviser said the very fact that the sides had managed to arrange such a meeting was a promising sign.
"The work begins today, and by some point around Friday we should be able to achieve concrete results," Valeriy Chaly told reporters in Kiev.
UKRAINE LOOKS TO NATO
Adding to the tensions was the Ukrainian parliament's decision on Tuesday to officially drop the neutrality the country adopted under Russian pressure in 2010.
The ceremonial shift in Kiev's diplomatic allegiance was in line with Poroshenko's vow to put Ukraine under Western military protection in the face of Russian threats.
Ukraine sought Nato membership in the early post-Soviet era but - its once-mighty army in ruins and riven by corruption - was never viewed as a serious candidate.
The February change of regime in Kiev upset Putin's plans to get Ukraine to sign into a new bloc that Moscow hopes will counterbalance Nato and the European Union.
Moscow also has set Kiev's exclusion from all military unions as a condition for any Minsk deal.
Russian Prime Minister Dmitry Medvedev warned on the eve of the vote that "in essence, an application for Nato membership will turn Ukraine into a potential military opponent for Russia."