NEW YORK, Sept. 24 - Ukraine will probably have to readjust its $17 billion loan program with the International Monetary Fund due to the country's costly conflict with pro-Russian separatists in the east, the prime minister said on Wednesday, Reuters reported.

"We do understand that we have to readjust the program," Prime Minister Arseniy Yatseniuk said at the Council on Foreign Relations in New York.

"Because when we started the program with the IMF, it was a peace program," he said. "For today, this is a wartime government and a wartime program."

The IMF program, part of a broader $27 billion funding package, was agreed in April and intended to shore up the former Soviet republic's foreign currency reserves and support the state budget.

But the conflict between Ukrainian troops and rebels raged on for longer than the IMF had initially expected, costing 'billions' of dollars for the war effort, Yatseniuk has said.

The two sides accepted a ceasefire earlier this month.

The prime minister's comments echo those of outside analysts, who view the IMF's money as insufficient to bring the Ukrainian economy back from the brink, after the conflict destroyed critical infrastructure, hit the currency and worsened banks' capital needs.

The IMF earlier this month said the money planned under the program is sufficient as long as the fighting subsides in coming months.

However, speaking on the sidelines of the United Nations General Assembly, Yatseniuk emphasized that the government's financial constraints would not lead it to default on its debts, despite investor concerns.

Investors have focused on a controversial $3 billion Ukrainian bond held by Russia that carries a clause which - given Kiev's steadily worsening finances - may enable the Kremlin to demand immediate repayment.

Under the worst-case scenario, investors fear that if Moscow is not paid on time, the bond would also force payment on all of Ukraine's remaining dollar bonds, under so-called cross-default provisions carried by most Eurobonds.

"We strongly believe and we are confident that Ukraine will not default," Yatseniuk said in response to a question about the Eurobond held by Russia. (rt/ez)