WASHINGTON, March 12 - U.S. President Barack Obama warned Russia it faced costs from the West unless it changed course in Ukraine, and pledged to "stand with Ukraine" as he met with the country's new prime minister in Washington.

"We will never surrender," Ukrainian Prime Minister Arseniy Yatseniuk vowed as he and Obama met in a White House show of support for the embattled leader.

"Mr. Putin - tear down this wall - the wall of more intimidation and military aggression," Yatseniuk told reporters in remarks aimed at Russian President Vladimir Putin and a reference to then-President Ronald Reagan's challenge to the Soviet Union in a 1987 speech at the Berlin Wall.

But Obama and Yatseniuk outlined a potential diplomatic opening that could give Russians a greater voice in the disputed Crimean region, where a referendum is scheduled for Sunday on whether it should become part of Russia.

Yatseniuk told a forum in Washington after his White House meeting that his interim government was ready to have a dialogue and negotiations with Russia about Moscow's concerns for the rights of ethnic Russians in Crimea.

Asked what a political solution would look like, Yatseniuk said: "If it is about Crimea, we as the Ukrainian government are willing to start a nationwide dialogue (about) how to increase the rights of (the) autonomous republic of Crimea, starting with taxes and ending with other aspects like language issues."

Obama ridiculed the referendum, saying: "The issue now is whether Russia is able to militarily dominate a region of somebody else's country, engineer a slapdash referendum and ignore not only the Ukrainian constitution but a Ukrainian government that includes parties that are historically in opposition with each other."

"We will continue to say to the Russian government that if it continues on the path that it is on, then not only us but the international community, the European Union and others will be forced to apply a cost to Russia's violation of international law and its encroachments on Ukraine," he added.

Obama said the United States and Ukraine recognized the historic ties between Russia and Ukraine, but added: There is a constitutional process in place and a set of elections that they can move forward on that in fact could lead to different arrangements over time with the Crimean region.
"But that is not something that can be done with the barrel of a gun pointed at you," Obama said.

Yatseniuk said his government was eager for talks with Russia about Ukraine but made clear his country "is and will be a part of the Western world."

"We fight for our freedom, we fight for our independence, we fight for our sovereignty, and we will never surrender," he said at the White House.

In Crimea, the regional government is led by a Russian separatist businessman whose party received just 4 percent of the vote in the last provincial election in 2010 but who took power on February 27 after gunmen seized the assembly building.
Two days later, Putin announced that Russia had the right to invade Ukraine to protect Russian citizens.

Preparations for Sunday's referendum are in full swing. Banners hang in the center of Crimea's capital, reading: "Spring - Crimea - Russia!" and "Referendum - Crimea with Russia!" (rt/ez)