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Ukraine has declared a state of emergency and told its citizens in Russia to immediately come home, while Moscow began evacuating its Kyiv embassy.
Shelling intensified at the line of contact in eastern Ukraine, where Russian President Vladimir Putin recognised the independence of two Moscow-backed rebel regions this week and has ordered the deployment of Russian forces as "peacekeepers".
Convoys of military equipment including nine tanks moved towards eastern Ukraine's Donetsk from the direction of the Russian border, a Reuters witness reported.
But there was still no clear indication of whether Putin will launch a massed assault on Ukraine with the tens of thousands of troops he has gathered near the border.
A US defence official said the Russian forces were "as ready as they can be" for an attack.
"Predicting what might be the next step of Russia, the separatists or the personal decisions of the Russian president - I cannot say," Ukraine's President Volodymyr Zelenskiy said.
That uncertainty and growing volley of sanctions on Russian interests by Washington and its allies have jolted financial markets, from oil and shares to wheat.
The rouble plunged around three per cent as the European Union blacklisted Russian lawmakers, freezing their assets and banning travel.
Washington targeted a major gas pipeline project from Russia, and London aimed for Russian debt.
Oil prices reversed their early losses on the day, while Wall Street slipped on news of Ukraine's emergency measures.
The 30-day state of emergency was approved by parliament on Wednesday. It restricts the freedom of movement of conscripted reservists, curbs the media and imposes personal document checks, according to a draft text. The restrictions come into force from Thursday.
Kyiv also announced compulsory military service for all men of fighting age.
Moscow denies planning an invasion and has described warnings as anti-Russian hysteria. But it has taken no steps to withdraw the troops deployed along Ukraine's frontiers.
On Wednesday, it took down flags from its embassy in Kyiv, having ordered its diplomats to evacuate for safety reasons.
Western countries have been warning for weeks about the possibility of the bloodiest war in Europe for decades. That has not materialised yet but the threat remains, leaving policymakers to struggle with calibrating their response.
Western leaders say tougher sanctions than so far unleashed are in reserve in case of a full-scale invasion, for example if Russia helps separatists seize parts of eastern Ukraine they claim but do not currently control.
The separatist leader of one breakaway region said on Wednesday that Ukrainian government forces should withdraw from such territory and take their weapons with them.
None of the sanctions so far directly targets Putin himself, or are expected to have serious consequences for Moscow, which is sitting on more than $US630 billion ($A871 billion) in international reserves.
Ukraine's military said one soldier had been killed and six wounded in increased shelling by pro-Russian separatists using heavy artillery, mortar bombs and Grad rocket systems in the two breakaway areas in the last 24 hours.
New satellite imagery showed several fresh troop and equipment deployments in western Russia and more than 100 vehicles at a small airfield in southern Belarus, which borders Ukraine, according to US firm Maxar.
For months, Russia has presented the crisis mainly as a dispute with the West, demanding security guarantees, including a promise never to allow Ukraine to join NATO.
But the recognition of the separatist regions was accompanied by much stronger language against Ukraine.
In a TV address on Monday, Putin characterised the Ukrainian state as an artificial construct wrongly carved out of Russia by its enemies.
Putin said he was always open to finding diplomatic solutions but that "the interests of Russia and the security of our citizens are unconditional for us".
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Separatists in Ukraine have asked for Russian help to repel "aggression" and Kyiv announced compulsory military service and a state of emergency, as the West slapped more sanctions on Moscow in a bid to stop an all-out invasion.
In one of the worst post-Cold War security crises in Europe for decades, convoys of military equipment, including nine tanks, moved towards the eastern Ukrainian area of Donetsk from the direction of the Russian border on Wednesday, a Reuters witness reported.
Shelling has intensified in the east, where Russian President Vladimir Putin has recognised two separatist regions as independent and ordered the deployment of what he called peacekeepers, a move the West calls the start of an invasion.
But there was still no clear indication of whether Putin will launch a massed assault on Ukraine with the tens of thousands of troops he has gathered on its borders. Moscow has long denied that it has plans to invade.
The leaders of the two breakaway areas want Putin to intervene.
"I am asking for help to repel the Ukrainian regime's military aggression against the population of the Donetsk People's Republic," said Denis Pushilin who heads the area Moscow recognised as independent, according to TASS news agency.
The White House rejected the comments as another Russian false flag operation, a fake crisis manufactured to justify greater Russian military intervention in Ukraine.
"This is an example of it," White House press secretary Jen Psaki told reporters.
"That is suggesting that they feel under threat. By whom? The Ukrainians that the Russians are threatening to attack?"
Kyiv warned the move was an escalation of Russia's military pressure and sought an urgent meeting of the United Nations Security Council. Ukrainian President Volodymyr Zelenskiy said Moscow had approved an offensive and not replied to an invitation for talks.
"Today I initiated a telephone conversation with the President of the Russian Federation. The result was silence," he said.
UN chief Antonio Guterres has dismissed claims of a genocide in eastern Ukraine. Under international law, genocide is an intent to destroy, in whole or in part, a national, ethnical, racial or religious group.
A total of 80 per cent of the soldiers assembled are in a position to launch a full-scale invasion on Ukraine, a senior US defence official said.
Satellite imagery taken on Wednesday showed new deployments in western Russia, many of them within 15km of the border with Ukraine and less than 80km from the Ukrainian city of Kharkiv, a US company Maxar said.
The images showed field deployment, military convoys, artillery and armoured personnel carriers with support equipment and troops. The images could not be independently verified by Reuters.
A 30-day state of emergency in Ukraine restricting the freedom of movement of conscripted reservists, curbing the media and imposing personal document checks, according to a draft text, begins on Thursday.
The Ukrainian government has also announced compulsory military service for all men of fighting age.
While the West has held off the most stringent sanctions measures it could impose, the US stepped up the pressure by imposing sanctions on the firm building the Nord Stream 2 gas pipeline and its corporate officers.
"We will not hesitate to take further steps if Russia continues to escalate," said US President Joe Biden.
The White House said the sanctions do not affect former German chancellor Gerhard Schroeder, who has headed the shareholders committee of Nord Stream since 2005.
Germany on Tuesday froze approvals for the pipeline, which has been built but was not yet in operation.
Ukrainian government and state websites, which have experienced outages in recent weeks blamed by Kyiv on cyber attacks, were again offline on Wednesday. Ukraine's parliament, cabinet and foreign ministry websites were affected.
For months, Russia has presented the crisis mainly as a dispute with the West, demanding security guarantees, including a promise never to allow Ukraine to join NATO.
But the recognition of the separatist regions was accompanied by much stronger language against Ukraine, which Putin called an artificial construct wrongly carved out of Russia by its enemies.
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Russia has hit back at Australia after the prime minister announced a raft of sanctions, saying Canberra has been indifferent to discrimination faced by Russian speakers.
Prime Minister Scott Morrison says Russian President Vladimir Putin appears intent on following through on his threat of an invasion.
"As yet we haven't seen the full-scale invasion take place in Ukraine and let's hope that that still is averted," he told the ABC on Thursday.
"But Russia is it at peak readiness for such a full scale invasion - that's our advice."
President Vladimir Putin signed a decree on the deployment of troops to the breakaway enclaves in the regions of Donetsk and Luhansk in eastern Ukraine in a move he said is aimed at keeping the peace.
The Russian embassy has responded at the new measures, accusing Australia of turning a blind eye to discrimination by "the radical nationalistic regime in Ukraine and to the plight of civilians in Donbass living for years under blockade and constant shelling from the Ukrainian military".
"In alignment with its key partners, Canberra has played its part in supporting and encouraging the xenophobic bullies based in Kyiv."
In a statement, the embassy said the decision to recognise the Donetsk and Luhansk regions on humanitarian grounds to "protect" civilians, including hundreds of thousands of Russian nationals.
"(Russia) will from now on guarantee the right of (Donetsk and Luhansk) residents to live in peace and preserve their language and cultural identity."
Mr Morrison rejected Russia's characterisation of the two territories it occupies and accused the country of spreading misinformation.
Australia has not asked Russia's ambassador to leave the country, but Mr Morrison said sanctions would be taken one step at a time.
"The sanctions we've announced ... will be just the start," Mr Morrison said.
"As yet, we haven't seen the full-scale invasion take place in Ukraine, and let's that that still is averted."
Russia's ambassador to Australia, Alexey Pavlovsky, was also hauled in to meet with the secretary of the Department of Foreign Affairs and Trade on Wednesday afternoon following the announcement of the sanctions.
The prime minister said 185 Australian citizens in Ukraine have requested assistance to leave the country.
It's estimated there are about 1400 Australians in Ukraine, although the majority have elected to stay.
Mr Morrison confirmed about 430 visa applications from Ukrainians had been made to extend visas by six months.
Foreign Minister Marise Payne said it was an "obscene perversion" for Russian President Vladimir Putin to speak of Russian soldiers acting as "peacekeepers" in Ukraine.
"Any suggestions that there is a legitimate basis for Russia's actions are pure propaganda and disinformation," Senator Payne told reporters during a visit to the Czech capital Prague.
She said Australia would not hesitate to impose more sanctions if Russia escalated tensions.
Overnight on Wednesday, Ukraine declared a state of emergency and told its citizens in Russia to leave while Russia began evacuating its embassy in Kyiv in the latest signs that a full-scale invasion could be imminent.
The head of the Ukrainian mission in Australia, Volodymyr Shalkivskyi, told the Nine Network on Thursday his country is on full alert.
"A full-scale invasion is possible. There is still the movement of Russian troops along our borders and, actually, build-up of those troops. We are getting ready," he said.
"There is still room for negotiations and we keep that door open."
Asked if he thought sanctions imposed by the United States - and others including Australia - would deter Mr Putin, Mr Shalkivskyi said "you cannot use kind of normal logic when you consider the actions of Mr Putin".
"(Russia) has military superiority over Ukraine, it has nuclear weapons, at least, in their possession.
"But the consequences of full-scale invasion might be very dramatic for the entire world because, well, first of all, it's not going to be a one-day invasion. Ukraine will resist."
Australia has ruled out direct military assistance but is supporting Ukraine's cyber capability.
with reporting from Reuters
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Prince Harry has launched a High Court libel action against the publisher of the Daily Mail newspaper.
Court filings show the Duke of Sussex filed a claim against Associated Newspapers Limited (ANL) on Wednesday afternoon.
It is not known which of the publishers' titles - which also includes The Mail On Sunday and MailOnline - the claim relates to and there is no indication which article is complained of.
The duke is currently bringing privacy claims against News Group Newspapers, which publishes The Sun, and Mirror Group Newspapers, now Reach, which publishes The Mirror, over alleged phone hacking and unlawful information gathering.
Harry, 37, is also involved in litigation against the Home Office over his security arrangements when he is in the UK.
He is bringing a High Court challenge against a Home Office decision not to allow him to personally pay for police protection for himself and his family while in the UK.
Harry wants to bring his son Archie and baby daughter Lilibet to visit from the US but his lawyers say he and his family are "unable to return to his home" because it is too dangerous.
It follows an incident in London in the summer of 2021 when his security was compromised after his car was chased by paparazzi photographers as he left a charity event.
His wife, the Duchess of Sussex, previously brought a successful privacy claim against ANL over articles which reproduced parts of a "personal and private" handwritten letter to her estranged father Thomas Markle.
Meghan was awarded one pound nominal damages, along with an undisclosed sum which she donated to charity, after winning her case.
ANL was also ordered to issue a front-page apology and pay the duchess's legal costs.
An appeal by ANL was dismissed by senior judges in December last year.
A spokesperson for the duke said: "I can confirm the duke has filed a complaint against Associated Newspapers Limited."
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