Simferopol, Ukraine (CNN) -- [Breaking news update at 3:36 p.m. ET] Ukraine's interim Prime Minister Arseniy Yatsenyuk on Thursday ...
Ukraine's interim Prime Minister Arseniy Yatsenyuk on Thursday blasted what he called Russia's "military aggression" of his country, saying it "has no reasons and no grounds." He told the U.N. Security Council there should be no dispute about the Russian military's role in Ukraine, despite Moscow's denials, saying their "military presence is clearly identified."
Despite Russia's actions, which Yatsenyuk characterized as illegal, the prime minister said, "We still believe that we have a chance to resolve these conflicts in a peaceful manner."
[Original story posted at 2:30 p.m. ET]
(CNN) -- Western countries warned Thursday that Russia faces costs unless it changes course in Crimea, with U.S. President Barack Obama pledging to "stand with Ukraine" three days ahead of a controversial referendum.
In a speech to the German parliament Thursday, German Chancellor Angela Merkel said Sunday's secession referendum in Crimea is unconstitutional and Russia's presence in the Black Sea peninsula violates Ukraine's territorial integrity.
She warned Russian President Vladimir Putin that his actions would lead to "catastrophe" for Ukraine.
"It would also change Russia economically and politically," she said.
But Putin has reiterated his previous stance: Ukraine's crisis was caused by internal factors, not by Russia.
On Thursday, at a meeting of Paralympic delegations in Sochi, the site of the recently completed Olympic Games, Putin said Moscow was not to blame for the crisis over the Crimea region.
"I would like to assure you that Russia was not the initiator of the circumstances we are talking about now," he told reporters.
Ukraine's interim leaders are seeking support from Western countries as pro-Russians tighten their grip in Crimea before Sunday's planned secession referendum.
Warnings from the West
At a Senate committee hearing in Washington on Thursday, U.S. Secretary of State John Kerry predicted that Sunday's referendum would favor Crimea rejoining Russia.
But he warned that, absent movement by Russia toward negotiating with Ukraine on the crisis, "there will be a very serious series of steps Monday in Europe and here."
Kerry is slated to meet Friday with his Russian counterpart, Sergey Lavrov.
After meeting Wednesday with Yatsenyuk, Obama offered a similar warning to Moscow: "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 ... will be forced to apply a cost to Russia's violations of international law," he told reporters. "There is another path available, and we hope that President Putin is willing seize that path."
The Paris-based Organisation for Economic Co-operation and Development said it had postponed activities related to Russia's process for membership in the organization.
In a boost to Kiev, members also "agreed that the OECD should respond positively to Ukraine's request to further strengthen existing OECD-Ukraine cooperation to take advantage of the OECD's expertise to address the public policy challenges it faces."
Meanwhile, Russia started military drills Thursday involving 8,500 troops in the southern part of the country bordering Ukraine, the Russian Ministry of Defense said.
The Southern Military District borders Ukraine and includes the North Caucasian Military District, the Black Sea Fleet and the Caspian flotilla, the ministry said.
Map of CrimeaSouthern Military District forces are deployed in the southern and north Caucasian districts of Russia, as well as on four military bases -- in South Ossetia, Abkhazia, Armenia and the Ukrainian city of Sevastopol, the ministry said. The Southern Military District is headquartered in Rostov-on-Don, Russia.
In the Austrian capital of Vienna, police arrested a Ukrainian businessman wanted by U.S. authorities on suspicion of bribery and other offenses. Austrian officials identified him as Dmitry F., 48. Other reports identified him as oil tycoon Dmytri Firtash, who was said to have close ties to ousted Ukrainian President Viktor Yanukovych.
Armed men have effectively isolated the Crimean Peninsula, which has an ethnic Russian majority, from the rest of Ukraine. Tensions have flared in recent days and worries have been heightened, as evidenced by long lines at banks in Simferopol, the regional capital.
'Putin's opinion is much more important'
Separately, Crimean authorities have secured offshore Ukrainian oil and gas projects in the Black and Azov seas, as well as the Chernomorneftegaz company's oil and gas fields, Russia's state-run RIA Novosti news agency reported Thursday, citing Crimean parliamentary speaker Vladimir Konstantinov.
"These deposits and the platform fully become the property of the Republic of Crimea," he said. "We have guarded them. These are our fields and we will fight for them."
A decision on Ukraine's Chernomorneftegaz has not been made, Russia's Interfax news agency reported, citing Crimean Deputy Prime Minister Rustam Temirgaliev. He said consultations would take place on whether "this enterprise will remain the property of the Republic of Crimea or will become part of Gazprom," the Russian energy giant.
Many average Russians support Putin
Flights to Crimea from Kiev, Istanbul and several other cities have been suspended for the week, with only those originating from Moscow landing.
From 8 a.m. to 8 p.m. Sunday, Crimeans will vote in favor of reuniting Crimea with Russia, as a subject of the Russian Federation, or supporting the restoration of the 1992 Constitution of the Republic of Crimea and Crimea's status as a part of Ukraine.
According to the 1992 Constitution, Crimea is an independent state, making the choice between joining Russia and independence.
Results are expected to be announced Monday, referendum committee chairman Michail Malishev said.
"I think that for Crimeans who are going to participate in the referendum, Putin's opinion is much more important than Obama's opinion, because the referendum is about our ties to Russia," he said. "So, no disrespect to President Obama, but Putin's opinion is much more important."
Ukraine's armed forces deployed in Crimea are free to leave military bases to vote, said Yury Zherebtsov, the Crimean government's official in charge of the ballot, according to Interfax. Zherebtsov said officials had visited military bases across Crimea to convince soldiers that "they have simply become hostage of the Ukrainian government" and to understand that "the only way to maintain the peace and unity of the Crimean people is by forming a union with Russia."
The new, pro-Russian government on the southeastern peninsula has said that if the voters opt to join Russia, the first step would be to declare Crimea an independent and sovereign state. Then it will apply to join the Russian Federation.
Russian leaders have greeted that prospect with open arms.
Diplomatic pressure
Russian-speaking troops wearing uniforms without identifying insignia have Crimea firmly under control. Though many observers believe the forces are Russian soldiers, Moscow has denied that is the case, describing them instead as local "self-defense" soldiers.
Crimea's push for separation has sparked an international outcry and warnings that the referendum results won't be recognized in Kiev or elsewhere.
In a phone call, French President Francois Hollande told Putin the referendum "has no legal basis." He urged Putin to "do everything to prevent the annexation of Crimea to Russia," saying that such a move would be unacceptable to the international community.
The G7 -- the world's leading industrial powers, without Russia -- and leaders of the European Council and Commission issued a statement calling on Russia to "cease all efforts to change the status of Crimea contrary to Ukrainian law and in violation of international law."
They urged Russia to immediately halt actions supporting the referendum.
U.S. military presence
The Obama administration is expected to announce Thursday a Pentagon plan to keep the aircraft carrier USS George H. W. Bush in the Mediterranean Sea longer than planned to help reassure NATO allies who may be feeling insecure after Russia's moves in Crimea, CNN has learned.
One official said U.S. military assets in the region were being reviewed for "what stays, what goes, what gets moved around." Although the U.S. effort with Russia focuses on diplomatic initiatives, the military part of the equation was discussed Tuesday at a White House meeting, the military official said.
Asked about the decision to keep the aircraft carrier in the Mediterranean, a senior administration official said not to expect much more muscle-flexing, or additional military steps, before Sunday.
Meanwhile, the Senate Foreign Relations Committee approved a package of loans and aid for Ukraine on Wednesday, along with sanctions against Russia for its military intervention. The measure, which heads to the full Senate, includes the approval of long-delayed reforms at the International Monetary Fund.
The aid package includes $1 billion in loan guarantees from the United States as well as $50 million to boost democracy-building in Ukraine and $100 million for enhanced security cooperation for Ukraine and some of its neighbors.
U.S. Defense Secretary Chuck Hagel said he and Joint Chiefs of Staff Chairman Gen. Martin Dempsey will discuss Ukraine next week in Washington with NATO Secretary General Anders Fogh Rasmussen.
World stage
Crimea, with a population of more than 2 million people, has stepped into the world stage spotlight.
Moscow has denounced the events that led to Yanukovych's ouster as an illegitimate coup and has refused to recognize the new Ukrainian authorities.
Yanukovych, who is now in Russia, insists he remains the legitimate leader of Ukraine and has vowed to return to Kiev "as soon as the circumstances allow."
He fled Kiev on February 22 after three months of protests against his decision to scrap a trade deal with the European Union and embrace closer ties with Russia.
Putin has said his government has the right to protect ethnic Russians living in Crimea.
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