Ukrainian President Petro Poroshenko has expressed careful optimism that a deal could be struck with Russia to end fighting in the east of his country.
The BBC’s Bridget Kendall says that there could be a breakthrough when talks including Ukraine, Russia and pro-Russia rebels start in Belarus.
Western countries meanwhile are preparing to tighten sanctions on Russia over its actions in Ukraine.
They are attending the second day of a Nato summit in Newport.
The West accuses Russia of sending arms and troops to back the rebels in eastern Ukraine. Moscow denies this.
Also on the itinerary on the second day of the summit in Wales is the rise of Islamic State (IS), and Afghanistan where the alliance is due to end its combat operation at the end of this this year.
But there is no government in place in Kabul to complete the handover because the outcome of presidential elections earlier this year is still being contested.
Taliban militants launched a deadly attack on a government compound on Thursday.
An IS video released on Tuesday showed the killing of US journalist Steven Sotloff, just days after the group beheaded another American reporter, James Foley.
In the latest video, an IS militant is seen threatening to kill a UK hostage, aid worker David Haines, who was seized in March 2013 in Syria’s Idlib province.
Nato Secretary General Anders Fogh Rasmussen had pledged “seriously” to examine any plea by Iraq to fight IS militants, while UK Prime Minister David Cameron said that his country was deciding whether to arm the Kurds.
‘The highest price’
Our correspondent says there is a lot at stake at the Nato summit, where President Poroshenko on Thursday confirmed that there was a chance that a deal could be signed in Minsk later on Friday, leading to a ceasefire within hours.
Russian President Vladimir Putin has also expressed hope that a deal can be agreed.
But Mr Poroshenko was careful not to sound too upbeat. [eap_ad_1] “Ukraine is paying the highest price,” the president said, “including lives of soldiers and innocent civilians. As president of Ukraine I must do my best to stop it.”
Mr Rasmussen also sounded a note of caution, warning that previous Russian peace offerings had turned out to be smokescreens.
It was not certain Mr Putin would stop destabilising Ukraine, he said.
“Based on experience we have to be cautious,” Mr Rasmussen said. “But… if we are witnessing a genuine effort to find a political solution, I would welcome it.”
On Wednesday, Mr Putin announced a seven-point plan, including a halt to “active offensive operations” by the Ukrainian military and pro-Russia rebels, international ceasefire monitoring, unconditional prisoner exchanges and humanitarian aid corridors.
The fighting on the ground in eastern Ukraine however is not abating, especially in areas where Ukrainian forces are under fire from pro-Russian rebels and are being beaten back.
If a peace deal fails to materialise, a UK government official said the EU would announce – jointly with the US – tougher punitive measures including more restrictions on Russian banking, energy and defence.
More so-called “Putin cronies” would have travel bans imposed on them, the official said.
But further sanctions may be delayed depending on the outcome of the negotiations in Minsk.
New sanctions will be implemented only if there is no breakthrough and no sign of an end to the recent escalation in eastern Ukraine.
Meanwhile, Nato leaders on Thursday agreed new financing to aid Ukraine’s military and provide better medical treatment for wounded soldiers.
The five-month conflict has so far seen some 2,600 soldiers killed.
Mariupol threatened
Ukrainian government forces have recently suffered several losses of territory in both the Luhansk and Donetsk regions, and further south around the city of Mariupol on the Azov Sea.
Reports are emerging that the separatists have begun shelling the outer defences of Mariupol. Eyewitnesses spoke of gunfire.
The BBC’s Fergal Keane in Mariupol says that explosions could be heard close to the city on Thursday night as rebels push towards it from the recently taken town of Novoazovsk.
Our correspondent says that the situation is confused and the atmosphere volatile. (BBC)
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