KIEV, Ukraine (AFP) - The United States tried to contain fallout from a leaked phone conversation in which a top diplomat uses the f-word regarding the European Union's handling of the crisis in Ukraine.

The embarrassing diplomatic incident comes as Ukraine's President Viktor Yanukovych was due to hold crisis talks with Russian counterpart and ally Vladimir Putin on the sidelines of the opening ceremony of the Winter Olympics in Sochi on Friday.

Washington and Brussels have engaged in a diplomatic standoff with Kiev and Moscow over mass protests that erupted in Ukraine in November when Mr Yanukovych rejected a pact with the EU in favour of closer ties with former Soviet master Russia.

But the leaked phone call appears to reveal US frustration with the EU over the handling of the long-running crisis.

Washington's new top diplomat for Europe, Ms Victoria Nuland, apologised on Thursday for her comments.

Ms Nuland had used the offensive word in what appeared to be a recent phone call with US ambassador to Kiev, Mr Geoff Pyatt, which was somehow intercepted and uploaded onto YouTube accompanied by Russian captions.

The US State Department was left fuming after the leak, pointing the finger at Russia for allegedly bugging the diplomats' phones.

"Certainly we think this is a new low in Russian tradecraft," said spokeswoman Jen Psaki, who did not dispute the authenticity of the call.

In the recording, which went viral after being re-posted by an aide to Russia's Deputy Prime Minister Dmitry Rogozin, Ms Nuland and Mr Pyatt discussed frankly which opposition figures should go into the new Ukrainian government.

The conversation appeared to have been held shortly after Mr Yanukovych accepted his pro-Russian government's resignation on January 28.

Ms Nuland, currently in Kiev, is expected to speak with the media later on Friday.

State Department spokesman Psaki said Ms Nuland had already apologised to her counterparts in Brussels, who refused to be drawn into the controversy on Friday.

"The EU is engaged in helping the people of Ukraine through the current political crisis. We don't comment on leaked alleged telephone conversations," said a spokesman for EU foreign affairs head Catherine Ashton, refusing further comment.

Russia also had no official reaction to the call while the aide who posted it, Dmitry Loskutov, said that he was browsing the Internet when he saw it on his "friend's feed in a social network."

The leak came as diplomatic tensions over Ukraine flared between the two former Cold War foes, with Mr Putin's economic adviser Sergei Glazyev accusing Washington of funding the protesters and even supplying them with ammunition.

"According to our information, American sources spend US$20 million a week on financing the opposition and rebels, including on weapons", Mr Glazyev, a hawkish advisor viewed as the Kremlin pointman on Ukraine told the Ukrainian edition of Kommersant newspaper shortly before the leak went viral.

In Russia's Black Sea city of Sochi, Mr Yanukovych was expected to discuss a critical bailout deal for his crisis-hit country.

In December, Mr Putin promised Mr Yanukovych the US$15 billion (S$19 billion) bailout but said last week the financing would not be released in full until the formation of a new government in Kiev.

Only US$3 billion has so far been transferred to Ukraine.

Mr Yanukovych flew to Sochi shortly after naming his close ally Sergiy Arbuzov as acting prime minister and is likely to try to convince Moscow that the government is still committed to the terms of the bailout.