Ukraine hit by cyber attack as U.S. questions Russian troop pullback

Russian servicemen drive tanks during military exercises

Kyiv appeared to blame Russia for a cyber attack on Tuesday as U.S. President Joe Biden warned that more than 150,000 Russian troops were still amassed near Ukraine's borders after Moscow's announcement of a partial pullback was met with scepticism.

World powers are engaged in one of the deepest crises in East-West relations for decades, jostling over post-Cold War influence and energy supplies as Moscow wants to stop the former Soviet neighbour ever joining the NATO military alliance.

Western nations have suggested arms control and confidence-building steps to defuse the standoff, which has prompted them to urge their citizens to leave Ukraine because an attack could come at any time. Russia denies it has any plans to invade.

On Tuesday, the Russian defence ministry published footage to demonstrate it was returning some troops to base after exercises. Biden said the United States had not verified the move. "Our analysts indicate that they remain very much in a threatening position."

Hours after Moscow's announcement, Ukraine said the online networks of its defence ministry and two banks were overwhelmed in what is called a distributed denial-of-service. The manoeuvre works when hackers flood a network with unusually high volumes of data traffic to paralyse it.

Although Kyiv did not name who was behind the incident, a statement suggested it was pointing the finger at Russia.

"It is not ruled out that the aggressor used tactics of dirty little tricks because its aggressive plans are not working out on a large scale," said the Ukrainian Centre for Strategic Communications and Information Security, which is part of the culture ministry.

Ukrainian bank Privatbank users reported problems with payments and a banking app, while Oshadbank said its systems had slowed down.

Russia's Federal Security Service did not immediately reply to a request for comment from Reuters.

"If Russia attacks the United States or our allies through asymmetric means like disruptive cyber attacks against our companies or critical infrastructure, we're prepared to respond," Biden said in televised remarks from the White House.

One European diplomat said the hacking was concerning because a full military attack on Ukraine would likely be preceded by a cyber attack.

"It could mean a physical attack is imminent, or it could mean Russia is continuing to mess with Ukraine," the diplomat said, on condition of anonymity. While such attacks are difficult to attribute, the diplomat said there was no doubt that Russia was behind them.

'MEANINGFUL DE-ESCALATION'

The White House said energy prices could be hit if sanctions are imposed on Moscow following an invasion as diplomatic efforts continued on Tuesday to resolve the crisis.

Secretary of State Antony Blinken told Russian counterpart Sergei Lavrov on a call that there needed to be "verifiable, credible, meaningful de-escalation" by Moscow.

Biden and French President Emmanuel Macron discussed their readiness to hit Russia with "severe consequences" over the crisis.

NATO Secretary-General Jens Stoltenberg said there "are signs from Moscow that diplomacy should continue" but also that Russia often left military equipment behind after exercises, creating the potential for forces to regroup.

At a joint news conference with German Chancellor Olaf Scholz, Russian President Vladimir Putin referred only briefly to the troop moves.

Putin told reporters Russia would not be satisfied with talk that Ukraine was not ready to join NATO any time soon and was demanding that the issue be resolved now.

"As for war in Europe... about whether we want it or not? Of course not. That is why we put forward proposals for a negotiation process, the result of which should be an agreement on ensuring equal security for everyone, including our country," he said.

Russia has been pressing for a set of security guarantees from the West and says it can exercise troops on its own territory as it sees fit.

Russia's show of force near Ukraine's borders has prompted months of frantic Western diplomacy and drawn threats of severe sanctions if it invades.

The Kremlin sought to portray its moves as proof that Western talk of war had been both false and hysterical.

"February 15, 2022 will go down in history as the day Western war propaganda failed. Humiliated and destroyed without a single shot fired," Foreign Ministry spokeswoman Maria Zakharova said.

The defence ministry published footage showing tanks and other armoured vehicles being loaded onto railway flatcars. Western military analysts said they needed more information to judge the significance of the latest troop movements.

Commercial satellite images taken on Sunday and Monday showed a flurry of Russian military activity at several locations near Ukraine. 

Russian shares, government bonds and the rouble rose sharply on hopes the situation was easing, and Ukrainian government bonds rallied. Major stock indices rose in the United States and Europe. 

Oil tumbled over 3%, retreating from a seven-year high.

"The situation is very fluid, but today is definitely a calmer day," said Robert Yawger, executive director of energy futures at Mizuho. "It's going to be a minute-to-minute, day-to-day type of thing."

Reporting by Maria Tsvetkova, Andrea Shalal and Dmitry Antonov; additional reporting by Reuters bureaux; writing by Mark Trevelyan and Costas Pitas; Editing by Angus MacSwan, Rosalba O'Brien and Grant McCool

REUTERS