Russian admiral issues ultimatum in Crimea; U.S. halts trade talks

• Ukraine%27s PM has said his nation is on verge of disaster
• Global leaders pressuring Russia to back down from military action
• Stocks markets fall as fears of broader conflict deepen

SEVASTOPOL, Ukraine -- A Russian admiral issued an ultimatum to Ukraine's military in Crimea to surrender as Moscow said the crisis can be defused if the country agrees to take back its ousted pro-Moscow president.

Amid rising international tensions, the Pentagon halted all military cooperation with Russia, including exercises and meetings, Rear Adm. John Kirby said.

There were broader economic actions as well. U.S. Trade Representative Michael Froman's office said it suspended upcoming bilateral trade and investment talks with Russia.

"Due to recent events in Ukraine, we have suspended upcoming bilateral trade and investment engagement with the Government of Russia that were part of a move toward deeper commercial and trade ties," the Froman's office said in a statement.

The Russian warning came as British Foreign Secretary William Hague on Monday called the standoff in Ukraine the "biggest crisis in Europe of the 21st century."

In Washington, President Obama said Russia is "on the wrong side of history'' by intervening in Ukraine. He said he is considering diplomatic and economic steps to isolate Moscow.

"Over time this will be a costly proposition for Russia, and now's the time for them to consider whether they can serve their interests in a way that resorts to diplomacy as opposed to force," Obama said from the Oval Office.

The U.S. originally estimated that 6,000 Russian troops were dispatched to Crimea, but Ukraine's mission to the United Nations said Monday that 16,000 had been deployed. That stoked fears that the Kremlin might carry out more land grabs in pro-Russian eastern Ukraine.

Vladimir Anikin, a Russian defense ministry spokesman in Moscow, dismissed reports of the ultimatum from Russian Black Sea Fleet Commander Aleksandr Vitko as nonsense but refused to elaborate.

Hague, who was speaking to BBC radio from Kiev, said that Russia is now in operational control of Ukraine's Crimean region and Europe and the United States were discussing what actions to take to reverse the occupation. Military actions was not being contemplated, he said.

Four Russian navy ships in Sevastopol harbor were blocking the Ukrainian anti-submarine warship Ternopil and the command ship Slavutych from leaving the dock, waiting for their commanders' responses, spokesman Maksim Prauta said.

Vitko, the Russian admiral, was quoted by Russia's official Interfax news agency as calling on Ukraine forces in Crimea to surrender: "If they do not give up by 5 a.m. tomorrow, there will be a real storm of subdivisions and units of Ukraine's military forces all over Crimea.'' That deadline passed without immediate signs of movement.

Ukraine's interim prime minister in Kiev remained defiant.

"No one will ever give Crimea to anybody," Ukrainian Prime Minister Arseniy Yatseniuk said at a press conference Monday reported by the Kyiv Post. "We realize that the Russian Federation has its interests but we address Russia: you have no right to protect your interests by violating ours."

U.S. Secretary of State John Kerry was heading to Kiev in an expression of support for Ukraine's sovereignty.

Russian Foreign Minister Sergey Lavrov suggested the crisis can be defused if Ukraine's parliament returned to a Feb. 21 agreement to let president Viktor Yanukovych stay in office until elections in December -- an unlikely move, since even members of his own party in Parliament voted to oust Yanukovych.

"Instead of a promised national unity government, a 'government of the victors' has been created," said Lavrov, who insisted Russia was in Crimea only to protect the lives of Russians.

Yanukovych fled to Russia after the agreement when it became clear that an opposition movement would not allow him to remain after he presided over the killing of scores of protesters in Kiev. The parliament voted to oust him and hold new elections sooner.

In East Ukraine outside of Crimea, fears grew that Moscow may move troops further into the country as it solidified its hold on Crimea. Kiev said Russian troops and unidentified defense forces sympathetic to Russia controlled all border crossings of Crimea, a key ferry and the two airports.

Gobal leaders issued a joint statement Monday on the increasingly fraught political situation in Ukraine and as geopolitical fears spread to the global investment community.

"We, the leaders of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States and the President of the European Council and President of the European Commission, join together today to condemn the Russian Federation's clear violation of the sovereignty and territorial integrity of Ukraine, in contravention of Russia's obligations under the U.N. Charter and its 1997 basing agreement with Ukraine," the leaders said in the statement.

The USA and other nations have already suspended preparations for a G-8 summit due to be held in Sochi, Russia, in June.

In a bid to reverse a plunge in the ruble — Russia's currency — the Bank of Russia hiked its key interest rate to 7% from 5.5% early Monday. Russia's benchmark Micex index fell as much as 11% and markets across Asia declined sharply. Wall Street is on track to start the week with steep losses.

"Any attempt of Russia to grab Crimea will have no success at all. Give us some time," Britain's Hague said in a separate news conference in Kiev on Monday.

"For today, no military options (are) on the table," he said, adding that what Ukraine urgently needed was economic and political support.

"Real support. Tangible support. And we do believe that our Western partners will provide this support," he said.

Hague said "the world cannot just allow this to happen." But he ruled out any military action.

Earlier in the day Ukraine's interim prime minister said that he thought that the danger had passed, saying he'd been assured by Russia's Prime Minister Dmitry Medvedev that Russia was not planning a full-scale invasion of Crimea.

"I think we have passed the peak of the crisis in the relations between Ukraine and Russia. My hope is that the words Russian Prime Minister Medvedev said to me that a decision to send troops has not been adopted are true," Yatseniuk told a meeting of European business leaders in remarks reported by Ukraine's official Interfax news agency.

Ukraine's incoming naval commander has announced he has switched allegiance to Crimea's pro-Russia administration. Viktoria Siumar, deputy secretary of Ukraine's National Security and Defense Council in Kiev said Rear Admiral Denis Berezovsky, who Sunday took an oath of allegiance to Crimea's local administration, was fired and is under investigation for treason.

Ukrainian military officials say no Ukrainian servicemen have switched sides to the self-proclaimed Crimean government and laid down arms, Ukraine's Interfax reported.

"Today we are facing absolutely massive amount of misinformation from Russian media that Ukrainian servicemen are laying down the arms," Siumar said.

She said that naval officers in Sevastopol and elsewhere continue to obey orders from Kiev and are not following Berezovsky.

Contributing: William M. Welch, USA Today; Associated Press