By Richard Balmforth
KIEV (Reuters) - Ukrainian separatists agreed on Thursday to resume peace talks to end the conflict in the east, but President Petro Poroshenko warned he might not extend a ceasefire beyond Friday night if their gesture was aimed only at buying time.
The move by the pro-Russian rebels, who have been fighting government forces since April, came after German Chancellor Angela Merkel spoke to Russian President Vladimir Putin for the second time in two days to discuss how to end the crisis.
In Berlin, a government source said the aim of the phone call, which Moscow said took place at Merkel's initiative, was to find a way of prolonging Kiev's ceasefire which is due to expire at 3 p.m. EDT (1900 GMT) on Friday.
More than 420 people, including Ukrainian servicemen, rebels and civilians, are estimated to have been killed in the fighting, the United Nations said in a statement dated June 24.
Poroshenko said he had heard of the rebels' readiness to hold a second meeting on Friday with the so-called "contact group" which includes former Ukrainian President Leonid Kuchma, Moscow's envoy to Kiev and a high-ranking official from the OSCE security and rights watchdog.
But, despite Western pressure on him, Poroshenko hinted heavily that there might be no extension of the ceasefire unless Kiev was satisfied with the results of contact group talks.
"It (Friday) is a very important day: if our conditions for the peace plan are not accepted, then we will make a very important decision," online newspaper Ukrainska Pravda quoted him as telling the Council of Europe in Strasbourg, France.
Poroshenko, installed as president only on June 7 and under pressure from his electorate not to bow to the separatists, has warned that government forces would switch to a "detailed Plan B" - widely assumed to be a government offensive - if the rebels use the ceasefire to re-arm and regroup.
Numerous breaches of the ceasefire - including the downing of a helicopter by rebels, killing nine servicemen, on Tuesday - have increased pressure on him to call the truce off.
In Strasbourg, he said almost 150 Ukrainian servicemen had been killed by rebels, including 18 in the past week since the ceasefire was declared.
He again criticized Russia for failing to give fuller support to his peace plan and for failing to halt arms supplies to rebels and stop "mercenaries" crossing into Ukraine. Moscow denies arming the rebels.
"It is clear that this peace plan can work only with the support of Russia. Unfortunately, the support of the Russian Federation is completely inadequate. Instead of them calling back their mercenaries, even more new, well-equipped and motivated fighters are arriving from the Russian Federation," Poroshenko told the Council of Europe session.
He said a normalization of relations with Russia was impossible without Moscow returning the Crimean peninsula which it annexed in March.
Western powers have been pressing Putin to rein in the well-equipped but often disunited pro-Russian militia who have taken up arms against the Kiev government, and have threatened to impose more sanctions if he fails to do so.
Putin strenuously denies abetting the rebels. But he has made clear he sees himself as the defender of the Russian-speaking minority in the east, many of whom say they have been alienated by a wave of Ukrainian nationalism since Moscow-backed president Viktor Yanukovich was toppled in February.
U.S. Secretary of State John Kerry said in Paris on Thursday that it was "critical for Russia to show in the next hours, literally, that they're moving to help disarm the separatists, to encourage them to disarm ... and to begin to become part of a legitimate process".
Poroshenko's peace plan offers rebels an amnesty and safe conduct out of the country if they lay down their arms.
He is also offering to people in the mainly Russian-speaking east broader Russian-language rights and will next week present a decentralization plan aimed at allowing the regions more control over their own finances and affairs.
The announcement of fresh peace talks, which the rebels said would take place in Donetsk, an industrial hub where the insurgency sprang up, seemed likely to cause the West to stay its hand in bringing in any fresh sanctions just now.
Though nobody from Poroshenko's administration will sit down with rebel leaders, the Ukrainians are represented in the contact group by former president Kuchma.
The phone-call between Merkel and Putin on Thursday touched on questions of "monitoring observance of the ceasefire between the sides in conflict, the necessity of extending the truce, the establishment of regular work by the contact group and the freeing of people being forcibly detained", the Kremlin said.
Putin also drew Merkel's attention to the worsening humanitarian situation in eastern Ukraine, where some areas have no power or water, and to the flow of refugees to Russian territory - 40,000 of which Russia says have been put into dedicated shelters.
From Strasbourg, Poroshenko was due to go on to Brussels where on Friday he will sign a landmark free trade agreement with the European Union which will open up new lucrative markets for Ukrainian goods.
It was Yanukovich's refusal, after months of pressure from Russia, to sign this agreement last November that brought thousands onto the streets of Kiev, leading to his downfall.
(Additional reporting by Andreas Rinke in Berlin,; Kevin Liffey in Moscow, Aleksandar Vasovic in Donetsk and Alessandra Prentice and Pavel Polityuk in Kiev; Editing by Robin Pomeroy)