KIEV, Nov. 28 - The European Union told Ukraine it was risking its economic future by rejecting a free-trade deal in favor of closer ties with Russia, hours before a likely frosty encounter on Thursday evening between EU leaders and President Viktor Yanukovych, Reuters reported.

Yanukovych flew into the Lithuanian capital Vilnius in time for a dinner in honor of the Eastern Partnership, the EU's four-year-old outreach program for former Soviet republics, including Ukraine.

He had been expected to sign a far-reaching free-trade and political association deal with the EU at the Vilnius summit, the result of years of negotiation.

But last week, following intense pressure from Moscow and growing concerns about Ukraine's dire economic situation, Yanukovych announced he was not ready to sign the EU deal yet and would instead focus on reviving economic dialogue with Russia.

EU enlargement commissioner Stefan Fuele said on Thursday Ukraine's decision to walk away from the agreement could imperil its future.

Disputing Ukraine's estimates that upgrading its economic base to European standards would cost $20 billion a year, Fuele said: "The Ukrainian economy needs huge investments, but these are not costs. They represent future income, more growth, more jobs and more wealth."

"The only costs that I can see are the costs of inaction allowing more stagnation of the economy and risking the economic future and health of the country," he told a business forum in Vilnius, adding the EU offer remained on the table.

Germany Chancellor Angela Merkel, arriving in Vilnius, underscored that the offer of closer trade ties was still open to Kiev but she had no hope of reaching an agreement at the summit.

Luxembourg's Prime Minister Jean-Claude Juncker was less definitive but said Ukraine had yet to meet EU conditions for a deal.

"I still have the small hope that we can come to an agreement tonight. I don't rule it out...We have laid down our conditions. They have not all been fulfilled," Juncker told reporters.

Among its conditions for a deal, the EU had asked that Ukraine addresses the issue of "selective justice" in its judiciary, an implicit demand that it addresses the fate of imprisoned former prime minister Yulia Tymoshenko, an arch rival of Yanukovych.

In an emotional appeal to the European Union, Tymoshenko's 33-year-old English-educated daughter, Yevgenia, made a plea on behalf of her mother, asking the EU not to turn its back on Ukraine.

"In the name of my mother, I ask you not to leave Ukraine without your protection. Without your support, we don't even have a chance for relatively honest elections, a partly independent press, the remains of political and economic competition and most importantly there will be no hope for positive change," she said.

Tymoshenko declared a hunger strike on Monday and has given her support to the tens of thousands of Ukrainians who have demonstrated in Kiev against the rejection of the EU deal.

Several thousand protesters demonstrating against the Ukrainian government's decision to walk away from the EU deal gathered on Kiev's Independence Square on Thursday as Yanukovych arrived in Vilnius. A few dozen protesters also demonstrated outside the summit venue in Vilnius holding placards saying "Yanukovych, don't steal the future" and "We are Europeans".

On the eve of the summit, Yanukovych told the EU to stop meddling in her case and appeared likely to retort that Tymoshenko's guilt had been proven in a Ukrainian court.

He had set the scene for a chilly reception by dismissing the EU's trade offer as "humiliating". The 600 million euros ($800 million), or so, of support on offer was "candy in a pretty wrapper", he said.

But his presence at the EU gathering - without signing the agreement - indicates he does not want to burn his bridges with the EU and leave his country's economic future solely to Russia, which wants Kiev to join a Moscow-led trade bloc. His government says the suspension of the EU deal marks only a "pause" in moves to integrate Ukraine into Europe's mainstream.

The EU side, however, said there was no readiness to enter into a geo-political bargaining game over Ukraine, likely a reference to possible increased financial aid.

"It was never a bazaar for billions. It was a question of giving Ukraine and the Ukrainian economy access to the largest integrated economic market in the world," said Swedish Foreign Minister Carl Bildt, who warned that Yanukovych's decision to abandon the EU deal left it vulnerable to pressure.

Yanukovych has already accepted short-term support from Moscow, which supplies Ukraine half of its gas needs, without committing to Russia's Customs Union with Kazakhstan and Belarus, and all the while keeping the EU within reach. (rt/ez)