Russian President Vladimir Putin reportedly told outgoing EU President Jose Manual Barroso in a phone call that he could "take Kiev in two weeks" if he wanted.

Putin's threat comes on the heels of his declaration that eastern Ukraine should create its own state - named "New Russia" by Putin - and another threat to Kazakhstan, where he said that "Kazakhs never had any statehood" and the country was simply "created."

Kazakhstan was part of the old USSR until it declared its independence in 1991.

Meanwhile, the government of Ukraine says that Russian troops are in two rebel held cities and that they are now fighting both separatists and Russia in the east.

IBT:

According to Italian newspaper La Repubblica, the Russian leader made the belligerent statement in a phone call with the outgoing EU leader, who is set to be replaced by Luxembourg's former prime minister Jean-Claude Juncker.

Despite the escalating tensions between all parties involved, Russian Foreign Minister Sergei Lavrov has told negotiators in the Belarussian capital of Minsk that an "immediate ceasefire" is Russia's priority.

However, both Ukraine and European Union member states accuse Russia of supporting the rebels fighting Kiev's forces with military supplies and personnel in eastern Ukraine.

Ukrainian President Petro Poroshenko accused Russia of "direct and open aggression" in the eastern rebel-held cities of Luhansk and Donetsk.

Ukrainian forces have now withdrawn from Luhansk airport in the restive eastern region after firefights with pro-Russian separatists. Ukraine's security council confirmed that the troops had withdrawn "in an organised manner".

The reported exchange between Putin and Barroso comes as the Russian leader continues to refer to eastern Ukraine as 'New Russia" or "Novorossiya".

Fears are also growing in Kazakhstan over Moscow's rhetoric towards the country, following Putin's claim that "Kazakhs never had any statehood" and the country was simply "created".

In response, Nazarbayev warned that Kazakhstan may leave the Russian-led Customs Union, an economic coalition which includes Belarus, if it feels that its independence is threatened in any way by Moscow.

"Kazakhstan will not be part of organisations that pose a threat to our independence," he told the Kazakh television station Khabar.

The massing of thousands of Russian troops on Ukraine's border and reports of Russian incursions into Ukraine have put a spotlight on Moscow's intentions in the post-Soviet states bordering the member nations of the Nato military alliance.

Ukrainian Defense Minister Valeriy Heletey said that the war against the separatists is over and that the army is now facing the Russian military in direct conflict:

In Moscow, a Kremlin aide sharply criticized EU Commission President Jose Manuel Barroso for breaching confidentiality when he quoted Russian President Vladimir Putin as saying that Moscow could take over Kiev in two weeks if it wished.

Yuri Ushakov, the Russian leader's foreign policy adviser, told reporters that Putin's statement was "taken out of context and carried a completely different meaning."

Ushakov lashed out at Barroso, saying it was a breach of diplomatic practices and "unworthy of a serious politician" to speak publicly about a private conversation.

Putin's comment reportedly came in response to Barroso pointing out Ukrainian and Western claims that Russia had sharply escalated the conflict in eastern Ukraine by sending regular army units into Ukraine. NATO has estimated that at least 1,000 Russian soldiers have entered Ukraine, helping turn the tide in the last week in favor of the pro-Russian insurgents. NATO also says 20,000 Russian soldiers have been positioned along the Ukraine-Russian border.

Ushakov on Tuesday reaffirmed Moscow's repeated denial that it has sent any soldiers in, even though a rebel leader said last week that Russian servicemen on leave were among some 4,000 Russians fighting in Ukraine.

Ukrainian Defense Minister Valeriy Heletey said on his Facebook page that the counter-insurgency operation against the rebels is over and the nation's military is now facing the Russian army.

Is Putin crazy? Is he serious? Or is he just trying to rattle NATO's cage with his reckless boasts and threats? Clearly, Putin didn't want his remark about being in Kiev in two weeks to see the light of day, which makes you think he is dead serious. And the way he keeps talking about the sovereign territory of Ukraine in the southeast as "New Russia" also shows he has an end game in mind to the conflict with Ukraine.

Once before,. western European leaders refused to believe that a fanatical dictator wasn't being serious when he talked about annexing Austria, the Sudentenland, and annihilating the Jews. We can't afford to dismiss these comments by Putin as being for domestic consumption, or part of some kind of elaborate psychological warfare strategy. This fellow means business, and won't stop until he meets overwhelmong resistance.