US President Barack Obama delivers a speech about US - Estonia relations, as well as the situation in Ukraine, at Nordea Concert Hall in Tallinn, Estonia on September 3, 2014
Moscow (AFP) - Russian President Vladimir Putin on Wednesday called on both Ukrainian rebels and government forces to cease fire and agree to the broad terms of a truce ending their four-month war.
Putin's first direct appeal on the insurgents to lay down their weapons came hours after the beleaguered Ukrainian president, Petro Poroshenko, said he and Putin had agreed on a ceasefire deal.
The announcements raised hopes of an end to fighting that has killed at least 2,600 people and driven relations between Russia and the West to their lowest ebb since the Cold War.
Putin outlined a seven-point peace plan that included the end "of active offensive operations by the (Ukrainian) armed forces and armed rebel units in the southeast of Ukraine."
The Russian leader added that he expected a final agreement to be announced by the insurgents and Kiev representatives during European-mediated negotiations on Friday in the Belarussian capital Minsk.
Poroshenko's office said the two presidents agreed by telephone on "a permanent ceasefire in Donbass (eastern Ukraine)."
"An understanding was reached concerning steps that will help to establish peace," a statement said.
Putin's appeal to the rebels came in advance of a NATO summit on Thursday at which the Western military bloc is expected to approve a new rapid reaction force for defending eastern Europe.
The Kremlin denies giving more than moral support to the insurgents who began their uprising against Kiev's new Western-backed leaders in April.
But Western powers say Moscow has been orchestrating the war as part of a land grab that started with the annexing by Russian troops of Crimea, a strategic region on the Black Sea, in March.
US President Barack Obama, on a highly symbolic visit to former Soviet republic and new NATO member Estonia, reacted cautiously to initial reports of a ceasefire deal, saying it was "too early to early to tell."
"There is an opportunity here. Let's see if there is a follow up," Obama said.
There was also still doubt over whether pro-Russian rebel commanders who have been routing Ukraine's army in recent fighting would comply.
One rebel representative of the eastern district of Donetsk said the rebels would halt fire only if government forces retreat from eastern cities they had been shelling in recent weeks.
"If Kiev withdraws from towns and cities -- and better yet, from the entire territory of the Donetsk People's Republic -- then there will be no sense in seeking a military solution to the conflict," Donetsk rebel leader Miroslav Rudenko told Russia's Interfax news agency.
- Unbending NATO support -
Obama used his Estonia visit to announce the deployment of extra US airforce units to defend the tiny Baltic state's border with Russia.
"Estonia will never stand alone," he said.
This comes in addition to a decision expected at the 28-nation NATO summit in Wales on creating a 4,000-strong force that could be deployed within two days to meet any Russian military movements in eastern Europe.
NATO's tough talk is being matched by Russia's announcement on Tuesday that it would review its military strategy to consider the Western alliance a "threat."
But NATO leaders have few options in helping Ukraine -- a nation of 45 million struggling to leave the Russian orbit and join both the European Union and eventually the US-led military alliance.
Direct military intervention has been ruled out and economic sanctions imposed on Russia have yet to show any sign of changing the Kremlin's hawkish ways.
NATO has published satellite images purporting to show more than 1,000 Russian troops and heavy weaponry moving into Ukraine's east.
There are accusations that the Kremlin's ultimate aim is to use the separatists to carve out a land corridor linking Russia to Crimea.
Putin denies this, but has said he wants "statehood" for the heavily Russified eastern districts of Lugansk and Donetsk.
Poroshenko has so far insisted that he can crush the rebellion and reunify his fragmented country.
But his negotiating position with both Russia and the insurgents had weakened dramatically in recent days by events on the ground.
Government forces have in some cases simply abandoned their equipment as they cede swaths of territory that they had initially won back from the militants.
Officials revealed Wednesday that 87 bodies of soldiers had been registered in morgues from recent fighting in Ilovaysk.