Gas pressure gauge on the main gas pipeline from Russia in the village of Boyarka, Ukraine,03 Jan 2009

The European Uninion efforts to resolve a bitter gas dispute between Russia and Ukraine foundered on Thursday when Russia reportedly refused to agree to a EU proposal to send independent monitors to check Russia's gas flow through Ukraine. Moscow's gas cuts have left some European countries facing shortfalls during a bitter winter.

Efforts to resolve Russia-Ukraine price dispute seemed to be making headway earlier in the day during European Union (EU) sponsored talks between Moscow and Kiev. The EU have proposed to send monitors to check the flow of Russian gas through Ukraine after Moscow accused Kiev of stealing gas bound for Europe.

Ukrainian Vice Prime Minister Hryhoriy Nemryrya told reporters the two sides had reached a breakthrough.

"I'm pleased to inform you that we agreed with the European Union that the EU monitors will be sent to Ukraine which we consider a positive and quick response on the initiative of the Ukrainian government that we highly value, because in our view, that could provide and help to restore a confidence and to prevent the collapse of trust that would be totally harmful for the frozen negotiations between [Ukraine gas company] Naftgaz and [Russia's] Gazprom," he said.

But later , the Czech Republic that currently holds the EU Presidency said Russian energy giant Gazprom had rejected the EU proposals for monitors.  Russia in turn blamed Ukraine.

More than a week since Russia cut its gas supplies for Kiev,a number of European countries are feeling the fallout of reduced gas supplies imported via the Ukraine. More than a dozen countries have reported a halt in gas shipments, with some citizens in Bulgaria, Bosnia and Serbia have been left without heat in icy winter weather.