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Russia's Putin seeks to woo EU-looking Ukraine with loans, discounts

President Vladimir Putin says Russia has extended loans and energy discounts to Ukraine, apparently seeking to lure its economically struggling neighbor back into the Kremlin's sphere of influence and away from the West.

Moscow fiercely opposes Kiev's plan to sign a free trade agreement with the European Union in November. The signing now hinges on Ukraine meeting European demands for the release from prison of former premier Yulia Tymoshenko.

While Russia previously has used threats and sanctions, Putin on Tuesday sought to strike a conciliatory tone. Speaking during an economic summit in Indonesia, he stressed that Russia and Ukraine are "brotherly states." Putin added that Russian banks have extended a $750 million loan to Ukraine and the energy giant Gazprom recently sold it natural gas at a discount.