Ukrainian President Petro Poroshenko is entering into a trade agreement with the European Union on Friday that has already sparked a rebellion, toppled a president and ignited an armed conflict with pro-Russia separatists. 
 
 Kiev's alignment with the 28-nation Western alliance won't lift Ukraine from its economic devastation for decades, and Ukrainian industries' deep entanglement with the Russian military-industrial complex ensures that each will remain a vital trading partner to the other for years to come. 
 
 So why is Russian President Vladimir Putin so agitated by Ukraine's European drift? 
 
 Analysts say it has more to do with his geopolitical ambitions than economics, as "losing" Ukraine to the Western alliance deals a blow to Putin's image as powerful leader of a resurgent Russia and defender of Russians throughout the former Soviet territory. 
 
 Putin has cast the EU-Ukraine association agreement as a threat to his nation's economy and security and vowed to do whatever is necessary to protect Russian economic interests. That has raised the specter of intensified fighting in eastern Ukraine and more Kremlin territorial seizures to clear a path from the Russian mainland to the strategic Crimean peninsula, which Moscow annexed in March. 
 
 Ukraine's worst unrest since the 1991 collapse of the Soviet Union was sparked by former President Viktor Yanukovich's decision to scrap a deal with the European Union in favor of closer ties with Russia. 
 
 Ukraine's antiquated heavy industries in the eastern part of the country were built decades ago, when Ukrainian-made jet engines were fitted onto Russian-made warplanes for the collective defense of the Soviet Union. Coal and uranium from Ukrainian mines fed steel foundries and nuclear plants in Russia, and Moscow depended on missile components produced in Ukraine to assemble its intercontinental ballistic arsenal. 
 
 "A lot of industry in Ukraine, particularly defense industries, are oriented toward supplying Russia, while in the European Union they follow NATO standards" in armaments and equipment production, said Keith Savard, senior managing economist at the Milken Institute. "Europe is not going to be keeping those industries in Ukraine employed, as I just don't see much substitutability there." 
 
 Nor is the energy trade between the two former Soviet republics likely to change, Savard said, despite the current battle between Russia's Gazprom monopoly and Ukraine over the price the former charges the latter for natural gas. Kiev has traditionally relied on discounted gas from Moscow in return for political concessions, such as refraining from pursuing membership in rival Western alliances. But cheap gas has fostered waste and allowed the Ukrainian government to supply subsidized energy to households, a practice that has led to massive public debt. 
 
 Gazprom, whose majority shareholder is the Russian government, has boosted gas prices for Ukraine by 80% since April. Savard predicts that a compromise will be reached to compel Ukraine to raise consumer energy prices and to prevent a new "gas war" in which Kiev could cut the flow of Russian gas exports to Western Europe. (Half the volume travels through Ukrainian pipelines.) 
 
 Moscow doesn't need or want conflict with Ukraine over the EU deal, Savard said, it just wants to remind Kiev of the nations' mutual dependencies. 
 
 "Russia wants to have a seat at the table. They don't want to be pushed aside," said the economist, who monitors post-Soviet developments. "I don't know how else to explain the fuss they are making over this agreement." 
 
 Putin has acted out against Kiev's Westward drift since it began four years ago with negotiation of the association agreement, which will allow tariff-free trade of most goods. Moscow slapped barriers on select Ukrainian food imports, such as cheese and chocolate, to pressure then-President Viktor Yanukovich to abandon the negotiations. It hoped to compel Kiev to drop the EU pursuit in favor of joining Putin's Eurasian Union, an Eastern bloc that includes Kazakhstan and Belarus. 
 
 Yanukovich eventually bent to Kremlin pressure and announced in November that he wouldn't sign the EU agreement. That unilateral decision to stay in Moscow's orbit prompted Ukrainians to rebel against corruption and bad governance, driving Yanukovich from office in February. 
 
 Putin used the pretext of government disorder in Kiev to invade and annex southern Ukraine's Crimean peninsula in March, securing control of the Russian naval base in Sevastopol. No country has recognized Crimea as part of Russia, but neither has any outside power been willing to help Ukraine recover it. 
 
 The fighting in eastern Ukraine's Donetsk and Luhansk regions is widely believed to be supported by Moscow, as many of the separatist leaders are Russian citizens and veterans of other post-Soviet regional conflicts. Putin denies having a hand in the separatist actions, which are spurred in part by fear that Ukraine's EU alignment will eventually mean closing their uncompetitive mines and factories. 
 
 Matthew Rojansky, head of the Kennan Institute think tank in Washington, which focuses on Russia and Ukraine studies, said Putin might be concerned that Ukraine's EU association will allow Kiev to import duty-free European manufactured goods, then re-export them to Russia at lower prices than Russia's inefficient manufacturers charge. 
 
 "Ukraine would become a conduit for relatively cheap and much-higher-quality European goods, which would force the Russian state to step in and subsidize inefficient Russian producers more than they are already doing," Rojansky said. 
 
 Whether that is a legitimate concern remains to be seen, he said, because Russia and Ukraine are too economically intertwined to provoke a full-fledged trade war. 
 
 "Russia is not going away, and Ukraine is not going to be Germany tomorrow, or even in 20 years," said Rojansky, who predicted that Putin and Poroshenko would have to come to some mutually beneficial accommodation, if they haven't already. 
 
 "They will remain interlinked for the foreseeable future," he said. "These are two economies that are linked at the hip." 
 
 Follow @cjwilliamslat for the latest international news 24/7 ||||| Media playback is unsupported on your device Media caption President Poroshenko: "EU deal marks real historic day for Ukraine" 
 
 Ukraine, Georgia and Moldova have signed partnership agreements with the European Union, in a move strongly opposed by Russia. 
 
 The pact - which would bind the three countries more closely to the West both economically and politically - is at the heart of the crisis in Ukraine. 
 
 Russian President Vladimir Putin said making Ukraine choose between Russia and the EU would split it in two. 
 
 A ceasefire with pro-Russian rebels in east Ukraine is due to end on Friday. 
 
 Ukrainian President Petro Poroshenko, in Brussels to sign the pact, said he would take a decision on an extension to the truce when he arrived back in Kiev later on Friday. 
 
 Russian Foreign Minister Sergei Lavrov said he would welcome an extension, but not if it were simply an ultimatum for separatists to lay down their arms. 
 
 Meanwhile the United Nations refugee agency said there had been a sharp rise in the numbers of displaced people in eastern Ukraine in the past week, with 16,400 people fleeing the area. 
 
 The total number internally displaced has reached 54,400, while a further 110,000 people left Ukraine for Russia this year. 
 
 Analysis: Steve Rosenberg, BBC News Moscow 
 
 There is a general sense of irritation or perhaps even anger here that Moscow has failed to convince countries like Ukraine, Moldova and Georgia not to sign this historic free trade deal today with the EU. 
 
 Moscow has economic concerns about these deals - it is worried that the Russian market could be flooded by cheap goods from the EU that would hit Russian producers. 
 
 More pressing for Moscow are the geopolitical concerns here - the whole idea of former Soviet states, countries that Moscow still views as being within its sphere of influence, drifting towards Europe and one day possibly becoming part of the EU - that really grates with Moscow, particularly in the case of Ukraine. 
 
 There's a lot of concern about what could happen in eastern Ukraine - the ceasefire announced a few days ago by Mr Poroshenko, and the ceasefire announced by armed separatist rebels, is due to expire today. It's unclear how things are going to develop later. 
 
 Ukraine crisis timeline 
 
 What happens after deal is signed? 
 
 Numbers behind the deal 
 
 Mr Poroshenko hailed the signing as Ukraine's most historic day since independence in 1991, describing it as a "symbol of faith and unbreakable will". 
 
 Mr Poroshenko also said he saw the signing as the start of preparations for joining the bloc. 
 
 Image copyright AP Image caption A ceasefire in eastern Ukraine expires on Friday 
 
 Image copyright AFP Image caption OSCE observers were released by pro-Russian rebels early on Friday 
 
 "Ukraine is underlining its sovereign choice in favour of membership of the EU," he said. 
 
 Meanwhile European Council President Herman Van Rompuy described it as a "great day for Europe". 
 
 "The EU stands by your side, today more than ever before," he told leaders of the three countries, adding that there was nothing in the agreements that might harm Russia in any way. 
 
 But Russian President Vladimir Putin said that "efforts to force Ukraine into an artificial choice between Russia and the EU had pushed Ukraine towards a split, a painful internal conflict". 
 
 Peaceful citizens were the main victims of the conflict, he said, with thousands of people seeking refuge in Russia. 
 
 'Nazi' jibe 
 
 The European Council on Friday issued a policy statement on Ukraine, setting out key steps it expected to happen by Monday, including the return of three key checkpoints to Ukrainian forces and the "launch of substantial negotiations on the implementation of President Poroshenko's peace plan". 
 
 Mr Poroshenko set out a 15-point peace plan on 20 June. It involves decentralising power and holding early local and parliamentary elections. 
 
 Media playback is unsupported on your device Media caption David Eades describes the moment Ukraine signed EU deal 
 
 It also proposes the creation of a 10km (six-mile) buffer zone on the Ukrainian-Russian border, and a safe corridor for pro-Russian separatists to leave the conflict areas. 
 
 The European Council did not announce any new sanctions against Russia but said that it continued to assess the situation. 
 
 Earlier senior Kremlin adviser Sergei Glazyev described Mr Poroshenko as a "Nazi" and said his presidency was illegitimate because parts of Ukraine did not vote in the May elections. 
 
 In a BBC interview, he said that Mr Poroshenko had no constitutional right to sign the treaty, which would damage the Ukrainian economy. 
 
 Media playback is unsupported on your device Media caption Some worry about losing Russia as a market for Georgian wine again, as Rayhan Demytrie reports 
 
 However, President Putin's spokesman Dmitry Peskov told Russian media that Mr Glazyev's comments did not reflect the official Kremlin position. 
 
 Mr Poroshenko's predecessor Viktor Yanukovych refused to sign the deal under pressure from Russia and protests led to his overthrow. 
 
 After this Russia annexed Ukraine's Crimea region and pro-Russia separatists in eastern regions declared independence, claiming that extremists had taken power in Kiev. 
 
 Fighting is said to have continued in some areas of eastern Ukraine despite the temporary ceasefire. 
 
 Media playback is unsupported on your device Media caption Adviser to Vladimir Putin Sergei Glazyev says Ukrainian President Petro Poroshenko is a Nazi 
 
 In another development, rebels released four international observers captured more than a month ago. 
 
 Alexander Borodai, head of the self-styled Donetsk People's Republic, said the members of the Vienna-based Organisation for the Security and Co-operation in Europe (OSCE) had been freed as a goodwill gesture. 
 
 More than 420 people have been killed in fighting between pro-Russia rebels and government forces in eastern Ukraine since mid-April, the UN estimates. ||||| Story highlights CNN EXCLUSIVE: Christiane Amanpour interviews Ukrainian President Petro Poroshenko 
 
 Poroshenko says a peace deal can come within months or even weeks 
 
 Russian President Vladimir Putin can be pragmatic or emotional, Poroshenko says 
 
 Ukraine will sign a cooperation agreement with the European Union on Friday 
 
 New Ukrainian President Petro Poroshenko says peace is possible if Russian President Vladimir Putin is in the right mood. 
 
 "Sometimes, the position of Mr. Putin is quite pragmatic, sometimes it is very emotional," Poroshenko told CNN's Christiane Amanpour on Thursday in an exclusive interview, his first broadcast interview since taking over as Ukraine's leader on June 7. "I just try to find out the time when he is more pragmatic than emotional." 
 
 He said negotiations with Russian separatists in eastern Ukraine would continue on Friday, the day his unilaterally declared cease-fire expires and the day that he also will sign a cooperation agreement with the European Union that sparked the crisis in his country. 
 
 Escalating conflict? 
 
 The talks are intended to end fighting between the Moscow-backed separatists and Ukrainian military and militia forces that threatens to escalate into a broader conflict. 
 
 "I am optimistic and I'm thinking that within a few weeks, maybe months, we can have a deal to establish peace," Poroshenko said in the interview with Amanpour while he was in Brussels for EU talks that will include signing the cooperation agreement between Europe and the former Soviet satellite. 
 
 With the signing occurring the same day Poroshenko's seven-day cease-fire expires, concerns increased of further unrest in parts of eastern Ukraine and economic retaliation by Putin. 
 
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 Asked by Amanpour if he was the person who could forge a peace deal with Putin, Poroshenko said that was his goal. 
 
 "I'm ready to make peace with anybody" 
 
 "I'm ready to make a peace deal with anybody," he said. "I want to bring the peace to my country, not because we are weak, not because we are less patriotic than anybody. We are ready to defend my country because I hate the idea not to use the last opportunity to bring the peace to the region." 
 
 Russia and Ukraine have been engaged in a tense standoff since March when Russia annexed the previously Ukrainian peninsula of Crimea and massed troops along other parts of its border with Ukraine. 
 
 In an effort to calm the situation, Poroshenko declared a cease-fire last week in Kiev's fight against pro-Russia separatists, but the violence continued. 
 
 On Thursday, a Ukrainian national guard base came under attack in Donetsk, Anti-Terrorist Operation unit spokesman Vladislav Seleznyov said. Ukrainian troops were able to repel the attack but were bracing for another assault, according to Seleznyov. 
 
 Two days earlier, Ukrainian authorities said pro-Russia militants shot down a military helicopter in eastern Ukraine, killing nine. 
 
 Poroshenko told Amanpour that Friday's negotiations, which will include European officials, must show some progress before his unilateral cease-fire expires at the end of the day. He seeks a commitment to negotiations, the release of hostages, a cease-fire and the withdrawal of Russian-backed forces from Ukraine. 
 
 The Organization for Security and Co-operation in Europe, which operates a special monitoring mission in eastern Ukraine, said Thursday that four members of a Donetsk-based team of OSCE monitors apparently held by separatists had been released. 
 
 Without Russian withdrawal, "it is a real war" 
 
 "All the troops on Ukrainian territory are Russian, they are Russian citizens," he said, adding that separatist leaders were from the Russian secret service. "If that continues, it is a real war." 
 
 Asked what would happen without a sufficient response from the other side, Poroshenko only said he would make that decision Friday. 
 
 On Wednesday, Russia's upper house of parliament voted, at Putin's request, to revoke the President's right to use troops in Ukraine. The move appeared to be an effort by Putin to defuse tension before Friday's watershed Ukraine-EU moment, which Putin opposes. 
 
 Poroshenko called signing the agreement with the EU the second-most important moment in his nation's history, ranking only behind independence. 
 
 "Geographically we are already in Europe," he said, adding that Ukraine connected with European values. 
 
 Asked whether he was worried about a negative economic reaction on Putin's part, Poroshenko said the Russian President recently promised not to undertake such steps. 
 
 "He promised that we will have a negotiation in a trilateral format, together with a European Union representative, so we do not expect any immediate negative reaction," Poroshenko said. 
 
 At the same time, he made clear that in his mind, the Russian annexation of Crimea -- which has an ethnic Russian majority -- cannot stand. 
 
 "Crimea is Ukrainian" 
 
 Calling the issue a top priority, Poroshenko declared: "Crimea is Ukrainian and the whole world confirmed that Crimea is Ukrainian." 
 
 Peace talks involving representatives from all sides occurred Wednesday in the Ukrainian city of Donetsk, Ukraine's official Ukrinform news agency said. 
 
 Those participating included Ukrainian government officials, pro-Russia separatists from the restive eastern Luhansk and Donetsk regions, Russian officials and members of the Organization for Security and Cooperation in Europe. 
 
 Meanwhile, U.S. Secretary of State John Kerry said the United States and Europe plan on possible further sanctions aimed at specific sectors of Russia's economy, depending on what choices Moscow makes ahead. 
 
 "It is critical for Russia to show in the next hours, literally, that they are moving to help disarm the separatists, to encourage them to disarm, to call on them to lay down their weapons and begin to become part of a legitimate political process," Kerry said Thursday after meeting with French Foreign Minister Laurent Fabius.
– It's official: The Ukraine has signed a free trade deal with the European Union, the BBC reports—the same free trade deal that sparked the protests that led to the current crisis. President Petro Poroshenko called the deal the most historic moment for Ukraine since it gained independence in 1991, while a none-too-pleased Vladimir Putin warned that Ukraine was being pushed into "an artificial choice between Russia and the EU" and a "painful internal conflict." A senior Kremlin adviser even called Poroshenko a "Nazi." In practical terms the deal, which was also signed by Georgia and Moldova, changes little "except Vladimir Putin's blood pressure," quips the LA Times. Russia will still be a key trading partner for Ukraine, thanks to their deep military-industrial complex ties. But politically Putin hates seeing former Soviet states drawn into closer alliances with the West. There's also some concern, a BBC analyst says, that Russia could be flooded with cheap EU goods. In other Ukraine developments: The current ceasefire is set to expire today. Putin is calling for a long-term ceasefire to replace it, and talks to institute one are planned for today. Poroshenko took his own shot at Putin, telling CNN yesterday that peace depended on the Russian leader's mercurial mood. "Sometimes, the position of Mr. Putin is quite pragmatic, sometimes it is very emotional," he said, adding, "I'm ready to make a peace deal with anybody."