Russian President Vladimir Putin has ordered thousands of troops to withdraw from the border with Ukraine ahead of diplomatic talks on bringing peace to the Western-backed, former Soviet republic.
The announcement by the Kremlin late Saturday appeared to be a positive signal prior to Putin's meeting with Ukrainian President Petro Poroshenko and European leaders in Milan on Friday.
Accused by Ukraine and the West of stoking a bloody insurgency in eastern Ukraine, Russia is facing its most serious international isolation since the end of the Cold War. Several rounds of Western sanctions have shaken the economy, intensified capital flight and weakened the ruble.
"The head of state has tasked the defence minister with beginning to bring troops back to their permanent bases," the Kremlin said.
The order meant that 17,600 servicemen, who the Kremlin said had been participating in drills in the southern Rostov region on the border with Ukraine, would withdraw.
Defence minister Sergei Shoigu received the order after reporting that "summertime training on military ranges of the Southern military district is over," the Kremlin said.
The late Saturday meeting between Putin and Shoigu took place after the president chaired a meeting of his national security council at his Black Sea residence in Sochi, said the Kremlin, without providing further details.
Kiev reported that attacks by insurgents in the east of the country had subsided.
The rebels and the Ukrainian military in the eastern Donetsk region said for their part that they had agreed to a "no-shooting period," and the army announced "progress" in negotiations and preparations to create a buffer zone, as required under a ceasefire agreement.
Russia denies meddling in Ukraine and says it has never deployed troops in the bloody conflict. But Moscow-based political analyst Alexei Makarkin suggested Putin's order to pull back troops from near the border was aimed at persuading the West to ease punitive measures.
"I think this is part of the compromises that Russia and Ukraine have reached," he said on Echo of Moscow radio.
Putin will meet Ukraine's Poroshenko for talks on the sidelines of an Asia-Europe Meeting (ASEM) in Milan on Friday.
The talks -- which will also address the two countries' long-running gas dispute -- will also include the prime ministers of Italy and Britain as well as German Chancellor Angela Merkel.
"I don't expect that these will be easy negotiations," Poroshenko said on Saturday.
Putin and Poroshenko last met in August in Belarus, after which Kiev announced a truce with the pro-Moscow separatists which has been repeatedly broken.
In addition, US Secretary of State John Kerry will hold talks with Russia's Sergei Lavrov in Paris on Tuesday, with Ukraine expected to be high on the agenda.
The six-month conflict in Ukraine has killed more than 3,300 people and sparked deep mistrust between Russia and its neighbours to the west.
Although tens of thousands of Russian troops have been stationed near the Ukrainian border, Moscow has always denied getting involved in the fighting on the side of local separatists.
However, human rights activists and relatives of Russian soldiers say military commanders have used ranges in the Rostov region to deploy troops to Ukraine.
Activists investigating numerous reports of regular Russian troops in Ukraine say that secret funerals for soldiers killed fighting there have taken place in recent weeks.
Russia's unacknowledged casualties may run into hundreds, according to some estimates.
Some opponents of Putin say the troop drawback means that the Kremlin is dropping its support for separatists.
"The project Novorossiya (New Russia) is over," former deputy prime minister turned opposition leader Boris Nemtsov said, referring to the loaded Tsarist-era name for what is now southern and eastern Ukraine.
Putin has used the term to refer to separatists battling to mould Ukraine's eastern regions into an independent statelet.
Nemtsov said the results of the Kremlin's six-month campaign were "disastrous".
Putin "wanted respect from the Ukrainian people," Nemtsov wrote on Facebook. Instead "he has got an enemy for many years to come".
Instead of winning international recognition, the Russian president "has become an outcast," he added.
Ukrainian analyst Taras Berezovets said the troop pullback meant Putin "had lost".
"Novorossiya has been left to its own devices," he said on Facebook.
The United States and European Union have already slapped several rounds of punitive measures on Moscow for its annexation of Crimea from Ukraine, and its alleged backing of the pro-Russian separatists.
Washington has warned that if Moscow does not withdraw its forces from eastern Ukraine new sanctions could follow.
In a sign that world leaders are keen to engage Putin in a further dialogue, Australia confirmed on Sunday that Putin would attend the G20 leaders' summit in November.