Billionaire candy magnate Petro Poroshenko, speaking in Warsaw, rejected the interim authorities' proposal to introduce a martial law in Ukraine's restive east. He said he would seek to pacify the regions with an offer of amnesty and a promise of early regional elections.
The move follows nearly two months of fighting in the region, where pro-Russia rebels have seized government buildings, declared two sprawling provinces independent and fought government forces.
Poroshenko's offer, expected to be detailed in his inaugural address on Saturday, came as the Ukrainian troops suffered a series of humiliating setbacks on Wednesday.
After hours of fighting in which six militants were killed and three Ukrainian servicemen were injured, the National Guards ran out of ammunition and had to leave their base near the eastern city of Luhansk.
Also Wednesday, rebels seized a border guard base on the city's outskirts following a nearly two-day-long siege and forced guards out of another base in the nearby town of Sverdlovsk on the Russian border. The guards were granted a safe exit and left with their weapons.
A rebel fighter who gave only his first name, Andrei, said they want to create a "humanitarian corridor" that would allow civilians to flee to Russia to escape the fighting.
The setbacks highlighted the ineffectiveness of Ukraine's badly trained and cash-starved armed forces, which also have been plagued by bad communication and poor supply lines.
Ukraine's provisional authorities have blamed the recent military failures on pro-Russia former President Viktor Yanukovych, claiming that his corrupt government starved soldiers of resources and training.
Scislowska reported from Warsaw. Nedra Pickler in Warsaw and Nataliya Vasilyeva and Vladimir Isachenkov in Moscow contributed to this report.
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