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Western allies seek Crimea solution
Western leaders were engaged in renewed efforts to secure a diplomatic solution to the Crimea crisis tonight - as a team of observers was once again denied entry to the peninsula.
In one of a series of telephone calls between allied capitals, David Cameron and Barack Obama were said to have agreed the need to persuade Russia to withdraw its forces and enter talks with Ukraine.
But the Prime Minister and US President renewed the threat of "further consequences" for Moscow if it sought to legitimise the "illegal" planned referendum in Crimea on becoming part of Russia.
The latest attempts to put pressure on Russian President Vladimir Putin to calm tensions came as warning shots were fired at the observer mission as it was rebuffed for a third consecutive day.
No-one was hurt in the latest setback for the group sent by the Organisation for Security and Co-operation in Europe (OSCE) to establish the extent of the control of pro-Russian forces.
There appeared though to be more hopeful signs of a possible dialogue between Moscow and the interim Ukrainian government in Kiev - which it says is illegitimate and controlled by nationalists.
Russia's deputy foreign minister met Ukraine's ambassador Volodymyr Yelchenko in what the Kremlin described as a "sincere atmosphere" - the first such meeting.
Ukraine's foreign minister also suggested that Moscow had not ruled out joining a "contact group" - one of the key planks of diplomatic efforts to end the crisis peacefully.
In a statement following the call with Mr Obama, a Number 10 spokeswoman said: " They agreed that there is still an opportunity for Russia to resolve the situation diplomatically by engaging in direct talks with the Ukrainians, returning Russian troops to their bases in Crimea and working with the rest of the international community to support free and fair elections in Ukraine in May.
"We should all work together to persuade President Putin to choose this diplomatic path out of the crisis. Both the Prime Minister and the President firmly believe that the proposed referendum in Crimea would be illegal and that any attempt to legitimise it would result in further consequences for Russia."
Mr Cameron has also spoken with Canadian Prime Minister Stephen Harper, the spokeswoman said, and expected to discuss the situation with other G8 leaders.
The PM is due to travel to Germany tomorrow where he will meet Chancellor Angela Merkel.
On Thursday, EU leaders threatened to impose asset freezes and travel bans on Russian officials unless there was swift action to end the stand-off, and the White House announced visa restrictions and paved the way for further economic measures.
An OSCE spokeswoman said its mission - requested by Kiev - was "again denied entry by unidentified armed people who fired warning shots.
"The group was not able to enter Crimea and is deciding on the further course of action," she said.
It also criticised "e xtreme censorship, shutting down media outlets and press hubs and attacks and intimidation of journalists" including the replacement of TV channels with Russian ones.
A week on from the effective takeover of the strategic territory by pro-Russian forces, Crimea remains highly tense, with another military base coming under siege last night.
Moscow denies its military is involved - describing the insignia-less soldiers as local freedom fighters - but there are reports of continuing significant movements across the border.
Kiev estimates the force now numbers in excess of 11,000.
The Crimean parliament has voted to join Russia subject to a referendum on March 16, a move endorsed by the Russian parliament but dismissed as illegal by the US and Europe.
It follows the February 22 ousting of pro-Russian president Victor Yanukovich, who fled to Moscow after weeks of protests in which dozens died - leading to the formation of an interim government.
Russian Foreign Minister Sergey Lavrov dismissed the regime as being controlled by " radical nationalists who have seized power with arms" and ruling using "intimidation and terror".
But his Ukrainian counterpart, Andrei Deshchytsi, said there was "reason to hope" a contact group could yet be established.
Downing Street said the Prime Minister and Mr Harper "discussed the need for the International Monetary Fund to lead on a package of financial assistance to the Ukrainian government to help provide economic stability in the months ahead and to ensure that the new Ukraine government implements the necessary economic reforms".
Mr Obama also spoke with French president Francois Hollande and Italian prime minister Matteo Renzi about the " grave concern over Russia's clear violation of international law", Washington said.
In a conference call with the leaders of Baltic states Latvia, Lithuania and Estonia he " reaffirmed the United States' unwavering commitment to our collective defence commitments" under Nato.
"The leaders made clear that Russia's continued violation of international law will isolate it from the international community," the White House said.
"They also discussed the need for the international community to provide strong support to the government of Ukraine as it works to stabilise its economy and prepares for elections in May.
"They agreed to continue close coordination, including through appropriate international organisations."