MINSK, Aug. 26 - The leaders of Russia and Ukraine agreed on Tuesday on the need to "de-escalate" the conflict in eastern Ukraine but fundamental differences remain, Reuters reported, citing the Belarusian president who hosted the talks.

After about six hours of negotiations with their Belarusian and Kazakh counterparts and top European Union officials, presidents Vladimir Putin of Russia and Petro Poroshenko of Ukraine began a one-on-one meeting, officials on both sides said.

The talks were aimed at defusing a separatist war that has heightened tensions between Russia and NATO and prompted the United States and EU to slap sanctions on Russia, drawing retaliation from Moscow. A U.N. report obtained by Reuters said at least 2,200 people have died in the conflict.

"We all wanted a breakthrough," President Alexander Lukashenko of Belarus told reporters after the multi-lateral part of the talks had finished.

"But the very fact of holding the meeting today is already a success, undoubtedly," he said. "The talks were difficult. The sides' positions differ, sometimes fundamentally... Everybody agreed on the need to de-escalate and free hostages."

In a televised statement at the start of the talks, Putin urged Poroshenko not to step up his offensive against the pro-Moscow rebels, and threatened to slap economic penalties on Kiev for signing a trade accord with the European Union.

Poroshenko replied by demanding a halt to arms shipments from Russia to the separatist fighters.

The United States and EU have backed Ukraine by imposing sanctions on Russia's finance, energy and defense sectors. Moscow has hit back by banning most Western food imports, in a trade war that threatens to tip Russia into recession and choke off economic recovery in Europe. Russia and NATO have both stepped up military exercises.

"We are convinced that today, (the Ukraine crisis) cannot be solved by further escalation of the military scenario without taking into account vital interests of the southeastern regions of the country and without a peaceful dialogue with its representatives," Putin said.

He said the Russian economy could lose about 100 billion rubles ($2.8 billion) if European goods reached its markets via Ukraine after Kiev signed the trade deal with the EU in June. Moscow would retaliate with trade measures if that were to happen, Putin added.

Poroshenko responded by defending a peace plan he issued in June, when the rebels in the southeast Donbass region scorned his invitation to lay down their arms and leave by a safe corridor.

"The prime condition for a stabilization of the situation in Donbass is the establishment of effective control over the Russian-Ukrainian border. It is vital to do everything to stop deliveries of equipment and arms to the fighters," he said. (rt/ez)