The European Union says the current stalemate between Ukraine and Russia over natural gas deliveries will damage the credibility of both as energy suppliers.

An EU statement warned that the dispute will have significant economic, financial and political consequences for both countries. The statement followed a meeting of EU energy ministers in Brussels.

The ministers repeated EU calls for a resolution of the dispute that has cut gas supplies to much of Europe without further delay.

Russia cut all gas supplies pumped to the West through Ukraine last week in a pricing dispute with Kyiv. A bilateral deal was signed Monday to restart gas supplies to the West, but no shipments have been received.

Ukraine's Prime Minister Yulia Tymoshenko in Kiev, Ukraine, 14 Jan 2009

Earlier, Ukrainian Prime Minister Yulia Tymoshenko and her Russian counterpart, Vladimir Putin, agreed in a telephone conversation today to meet in Moscow Saturday at a Russian-proposed summit on the crisis.

Meanwhile, Russia says it has for a third straight day opened a gas pipeline at the Ukrainian border and asked Kyiv to send a limited amount of gas on to Europe.  

But Ukraine's gas utility, Naftohaz, has refused, saying the route Gazprom is demanding would first force Ukraine to shut off energy supplies to millions of domestic consumers. Moscow insists the route is viable.

In the western Ukrainian city of Lviv, a group of demonstrators picketed the Russian consulate, protesting Moscow's policies in the gas crisis.
 
German Chancellor Angela Merkel, speaking today in Berlin alongside British Prime Minister Gordon Brown, renewed European calls for a quick solution. She said Russia remains at risk of further tarnishing its reputation as an energy supplier.  

Some information for this report was provided by AFP.