SIMFEROPOL (Crimea): Prime Minister Dmitry Medvedev flaunted Russia’s grip on Crimea by flying to the region and holding a government meeting there on Monday, angering Ukraine and defying Western demands to hand the peninsula back to Kiev.

The Ukrainian government denounced the visit, a few hours after the latest round of crisis talks between Russia and the United States ended inconclusively, as a “crude violation” of the rules of diplomacy.

Russia said it had pulled some troops back from near Ukraine’s eastern border, a move that could ease tension in the worst East-West standoff since the Cold War. The Defence Ministry said a motorised infantry battalion was being withdrawn from the region. A battalion numbers between 300 and 1,200 men.

However, Medvedev’s visit taunted Western leaders by underlining their inability to force President Vladimir Putin to relinquish Crimea, seized after the overthrow of Russian-backed Ukrainian President Viktor Yanukovich and annexed on March 21.

Accompanying Medvedev, outspoken Deputy Prime Minister Dmitry Rogozin - targeted by Western sanctions - left no doubt about the symbolism of the trip, saying on Twitter: “Crimea is ours. Basta!” Putin and German Chancellor Angela Merkel discussed by telephone ways of stabilising Ukraine and another former Soviet Republic, Moldova.

A Kremlin statement quoted Putin as calling for a comprehensive solution that would be a “blockade” on Moldova’s breakaway region of Transdniestria.

Soon after landing in Crimea’s main city of Simferopol with several members of his cabinet, Medvedev held a government meeting attended by Crimean leaders and outlined moves to revive the region’s struggling economy.

“Our aim is to make the peninsula as attractive as possible to investors, so that it can generate sufficient income for its own development,” he said, sitting at a large desk with Russian flags behind him.

“And so we have decided to create a special economic zone here. This will allow for the use of special tax and customs regimes in Crimea, and also minimise administrative procedures,” he told the meeting, broadcast live on Russian state television.

In comments that made clear Russia had no plans to give back the region, he set out moves to increase wages for some 140,000 state workers in Crimea, boost pensions, turn the region into a tourism hub, protect energy links, end reliance on Ukraine for water and improve its roads, railways and airports.—Reuters