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Russia and Ukraine Begin To Close Rifts

Pact represents shift from commonwealth structure toward a focus on bilateral ties. POST SOVIET-UNION

WITH regional conflicts raging on their borders, the presidents of Ukraine and Russia took an initial step Tuesday toward narrowing the rift between them during their first-ever bilateral summit here on the scenic eastern shore of the Black Sea.

As vacationers in colorful garb frolicked amid the lush greenery of this seaside resort, indoors the leaders of the two Slav giants worked on a new bilateral agreement on political, economic, and military issues that have consistently divided them. Their moves toward cooperation are clearly fueled by the need to form a common front in seeking solutions to regional problems in other former Soviet republics.

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"For the last several months, people have been extremely concerned about our difficult relationship and even spoke about the possibility of war," Russian President Boris Yeltsin said at a concluding press conference. "People will now breathe a sigh of relief - this our main achievement here," said Mr. Yeltsin.

"With this Dagomys agreement, we begin a drastic turning point in the relationship between our two great nations, placing it on a qualitatively new, equal level," said a visibly satisfied Ukrainian President Leonid Kravchuk. The Ukrainian leader has often expressed unhappiness that his fledgling state was overshadowed by its vast northern neighbor within the Commonwealth of Independent States, the loose confederation which replaced the Soviet Union. Bilateral focus

The agreement represents a shift away from the commonwealth structure toward a focus on bilateral ties between the two former Soviet republics. It sets up an inter-state commission to work out a full-scale political treaty between Russia and Ukraine and sets up a mechanism for regular summit meetings to resolve disputes.

"We are well aware that the future of the [Commonwealth of Independent States] depends on Russia and Ukraine's stands on the CIS," Mr. Kravchuk said. "We both came to the conclusion today that the CIS needs to be perfected."

The Ukrainian leader has repeatedly complained that agreements in the commonwealth are largely formal and rarely implemented. Kravchuk said his proposal for a commission to monitor compliance by member states with their agreements would be discussed at the upcoming summit of commonwealth leaders in Moscow July 6. Troubling conflicts Although the leaders said they did not discuss in detail the bloody conflicts in the neighboring Moldova and the Georgian autonomous republic of South Ossetia, these wars clearly were on their minds. In Moldova the Romanian-majority government is pitted against Russian separatists in the Trans-Dniester region. Troops from the Russian 14th Army stationed in the region have become directly involved in the fighting which has claimed hundreds of lives in recent days.

Ukraine recently shifted its stance of noninvolvement in the Trans-Dniester conflict toward one similar to Russia's. The Ukrainian government announced support for the region's move toward autonomy within Moldova. A large minority of the region's population is Ukrainian, and thousands of refugees fleeing the recent fighting have crossed into Ukraine.

Kravchuk told reporters that if Moldova unites with Romania, as many Moldovans demand, Ukraine would insist that the Dniester region have a right to vote on whether to separate itself. He said Ukraine considers itself a "guarantor" of the resolution of this problem, a status that Yeltsin quickly asserted was also Russia's.

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Russia and Ukraine will jointly try to mediate the conflict. President Kravchuk announced that the leaders of the four states involved in the Trans-Dniester dispute - Moldova, Romania, Russia, and Ukraine - would meet in Istanbul to seek solutions to end the fighting on June 25 during a summit meeting there of Black Sea leaders.

Between themselves, the two former Communists-turned-nationalists reached agreement on issues that have divided them for months. Although Ukraine won no strong guarantees against Russian territorial claims, it won concessions on the Black Sea Fleet, division of foreign property assets of the former Soviet Union, and on the introduction of a national currency in Ukraine.

The leaders decided that Ukraine and Russia will divide the 380-vessel fleet between their countries, putting the fleet under the joint command of the commonwealth armed forces pending those negotiations. Those talks are to define which portion of the fleet is "strategic," giving that part to Russia.

"Many differences were lifted," said Kravchuk regarding Ukraine's claims to introduce a currency, the hryvna, by the end of the year.

The Russian government has complained that the Ukrainians were contributing to uncontrolled growth of the supply of the ruble by issuing huge ruble credits to keep its industry afloat, at the same time it was planning to begin issuing the hryvna. According to Russian officials, the Ukrainians agreed to introduce their currency starting in July in a "non-cash" form, that is for credit purposes. The actual money could start circulating as early as September.

The Russians also pressed to resolve what they say is Ukrainian failure to fulfill trade agreements between the two tightly interlinked former Soviet republics. Russian Prime Minister Yegor Gaidar said that while Russia had fulfilled its contracted deliveries of oil, coal, and gas, Ukraine had sent only a third of the contracted steel and other products it promised. The imbalance for the first five months of this year amounted to 100 billion rubles (about $1 billion) he said.

In the agreement reached here June 23, the two countries said they would move to settle their trade accounts on the basis of world market prices. The leaders also agreed to set up customs posts on their borders but said they would not require visas for travel between the two countries.

Russia also agreed to turn over some of the foreign property left over from the Soviet Union, for Ukraine's foreign embassies. Also according to the agreement, Ukrainian and Russian servicemen in the unified commonwealth armed forces would be allowed to declare their of allegiance to either Russia or Ukraine. Walking together

Reflecting the relaxed atmosphere at the negotiations, just before signing their new bilateral treaty, the leaders took a brief walk together along the beach of this lavish ocean-front resort, joking with vacationing guests.

"This is a great move forward," said Volodymir Kryvhanivsky, Ukraine's ambassador to Russia, during a break in the talks. "Both presidents agreed that the main thing we must do today is show that we know how to compromise to reach agreements."

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