Armed men seized the parliament in Ukraine's Crimea region on Thursday and raised the Russian flag, alarming Kiev's new rulers, who warned Moscow not move troops beyond the confines of its navy base on the peninsula.
Crimea, the only Ukrainian region with an ethnic Russian majority, is the last big bastion of opposition to the new leadership in Kiev since President Viktor Yanukovich was ousted at the weekend and provides a base for Russia's Black Sea fleet.
Its regional parliament, meeting in another part of the building that was apparently still occupied by the gunmen, voted to stage a referendum on "sovereignty" for Crimea.
"I am appealing to the military leadership of the Russian Black Sea fleet," said Oleksander Turchinov, Ukraine's acting president, who warned Russia not to move personnel beyond areas permitted by treaty for those using its naval base.
"Any military movements, the more so if they are with weapons, beyond the boundaries of this territory will be seen by us as military aggression," he said.
Russia has repeatedly declared it will defend the interests of its citizens in Ukraine, and on Wednesday announced war games near the border involving 150,000 troops on high alert.
Although Moscow says it will not intervene by force, its rhetoric since the removal of its ally Yanukovich has echoed the runup to its invasion of Georgia in 2008, when it sent its troops to protect two self-declared independent regions and then recognized them as independent states.
Ukraine's leaders say they fear separatism in the Crimea.
In Washington, the White House warned Russia to avoid "provocative" acts. "We strongly support Ukraine's territorial integrity and sovereignty. We expect other nations to do the same," said White House spokesman Jay Carney.
Secretary of State John Kerry spoke to Russian Foreign Minister Sergei Lavrov and urged Moscow to work with the United States and its European allies to help stabilize Ukraine.
"We believe that everybody now needs to take a step back and avoid any kind of provocations," Kerry said at a joint news conference with German Foreign Minister Frank-Walter Steinmeier.
Ukraine's Foreign Ministry summoned Russia's acting ambassador in Kiev for consultations.
The face-off between Moscow and the West has revived memories of the Cold War. Ukraine has been in crisis since November, when Yanukovich abandoned a proposed trade pact with the EU and turned instead towards Russia. It escalated last week when scores of demonstrators were killed, many by police sharpshooters on rooftops, and Yanukovich was toppled.
The fresh turmoil in Crimea sent the Ukrainian hryvnia tumbling to a new record low of 11 to the dollar on the Reuters dealing platform. Ukraine's new central bank governor has abandoned a policy of propping up the currency which was rapidly draining its foreign reserves.
Yanukovich's overthrow will undoubtedly cost Kiev a $15 billion Russian bailout offered to Yanukovich as a prize by Moscow for spurning the EU trade pact. Ukraine urgently needs other sources of funding to stave off bankruptcy. The International Monetary Fund said it would send a team to Kiev in the coming days. [ID:nL1N0LW1KD]
New finance minister Oleksander Shlapak said he hoped the IMF would work on an aid package of at least $15 billion. Ukraine says it needs $35 billion over the next two years.
The minister also said he expected the hryvnia to strengthen soon at around 10 to the dollar.
No one was hurt when government buildings were seized in Crimea's regional capital Simferopol in the early hours by Russian-speaking gunmen in uniforms without insignia.
"We were building barricades in the night to protect parliament. Then this young Russian guy came up with a pistol ... we all lay down, some more ran up, there was some shooting and around 50 went in through the window," Leonid Khazanov, an ethnic Russian, told Reuters.
"I asked them what they wanted, and they said 'To make our own decisions, not to have Kiev telling us what to do'."
Acting interior minister Arsen Avakov said the attackers had automatic weapons and machine guns.
The regional prime minister said he had spoken to the people inside the building by telephone, but they had not made any demands or said why they were there. They had promised to call him back but had not done so, he said.
With the occupation apparently still under way, the regional parliament met in another part of the building and voted to hold referendum on May 25, the day Ukraine plans to elect a new president to replace Yanukovich. The referendum, if passed, would declare Crimea sovereign, with its relationship to the rest of Ukraine governed by treaty.
About 100 police gathered in front of the parliament, and a similar number of people carrying Russian flags later marched up to the building chanting "Russia, Russia" and holding a sign calling for a referendum on Crimea's status.
About 50 pro-Russia supporters from Sevastopol, where part of Russia's Black Sea navy is based, lined up shoulder-to-shoulder facing police. Gennady Basov, their leader, said: "We need to organize ourselves like this to maintain order while this illegal and unconstitutional government operates in Kiev."
The crowd cheered at news that parliament had voted for the referendum.
However, elsewhere there was some anger at the invasion of the regional parliament and the flying of the Russian flag.
Alexander Vostruyev, 60, in a leather cap and white beard, said: "It's disgrace that the flag if a foreign country is flying on our parliament ... It's like a man coming home to find his wife in bed with another man."
By nightfall, the Russian flag still flew over the building, although crowd in front began to dwindle.
The fear of military escalation prompted expressions of concern from the West, with NATO urging Russia not to do anything that would "escalate tension", although the alliance said neither it nor the United States had drawn up plans for how they would respond if Russia did intervene militarily.
Polish Foreign Minister Radoslaw Sikorski called the seizure of government buildings in Crimea a "very dangerous game".
Russia has a history of using its military power to protect allies who declare self rule in parts of other ex-Soviet states, notably in Georgia and also tiny Moldova. Members of Crimea's Russian majority have periodically agitated for independence at times of tension between Kiev and Moscow.
Still, any move by Moscow to assist Crimeans in breaking away from Ukraine - a nation of 46 million people on the ramparts of central Europe - would be a more direct challenge to the West than any Russian act since the Cold War.
Germany would do everything to support the new Ukrainian government, Chancellor Angela Merkel said in London after talks with British Prime Minister David Cameron, who said Russia must respect Ukraine's territorial integrity.
Ukraine's new rulers pressed ahead with efforts to restore stability to the divided country, approving formation of a national coalition government with former economy minister Arseny Yatseniuk as its proposed head.
Yatseniuk told parliament that Yanukovich had driven the country to the brink of collapse. He accused the deposed president of stripping state coffers bare and said $70 billion had disappeared into offshore accounts.
"The state treasury has been robbed and is empty," he said.
Yanukovich issued a statement on Thursday declaring he was still president of Ukraine and warning its "illegitimate" rulers that people in the southeastern and southern regions would never accept mob rule.
Russian news agencies said he planned to hold a news conference on Friday (1300 GMT) in the southern Russian city of Rostov-on-Don.
Additional reporting by Natalia Zinets and Pavel Polityuk in Kiev; Writing by Richard Balmforth; Editing by Giles Elgood and Peter Graff
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