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Russia's President Vladimir Putin addresses the audience as in Ulan Bator, September 3, 2014.RIA Novosti/Reuters

Ukraine and Russia appear to have reached a pact that would pause – or even end – their escalating military conflict, adding yet another curve to a twisting plot ahead of a key NATO summit that begins Thursday and will focus on redefining the alliance's relationship with Moscow.

Ukrainian President Petro Poroshenko announced Wednesday that he and Russian President Vladimir Putin had agreed on a "permanent ceasefire" in eastern Ukraine. Government forces have recently suffered a string of defeats at the hands of pro-Russian rebels in the region, amid evidence the insurgents received direct help from regular Russian troops and tanks.

The Kremlin quickly denied that Mr. Putin was party to any kind of ceasefire deal – Mr. Putin was quoted saying the conflict in eastern Ukraine was "none of our business, but Ukraine's internal affair" – and Mr. Poroshenko's office later clarified that the two sides had agreed only on a "ceasefire process."

Nonetheless, Mr. Putin laid out a seven-step plan that he claimed to have drafted by hand Wednesday while travelling from Siberia to Mongolia. The key points involved a halt in the rapid rebel advance in exchange for Ukrainian units pulling back out of shelling range of rebel-held cities.

It was not clear Wednesday whether Mr. Putin's plan was the one Mr. Poroshenko had agreed to in a telephone call between the two leaders.

Mr. Putin's seven steps also called for "full and objective international control over the observance of the ceasefire," as well as the opening of humanitarian corridors to the rebel capitals of Donetsk and Lugansk.

Russian media reported Mr. Putin saying he hoped a final agreement between Kiev and the rebels could be reached at a meeting set for Friday in the Belarusian capital, Minsk, and Ukraine's presidential press service reported that Mr. Poroshenko hoped the Minsk talks would be successful.

In a sign the deal may face strong opposition inside Ukraine, Prime Minister Arseniy Yatsenyuk came out strongly against Mr. Putin's seven points, calling them "an attempt to hoodwink the international community ahead of the NATO summit" and thus avoid new sanctions against Russia. Unlike Mr. Poroshenko, Mr. Yatsenyuk has to worry about parliamentary elections set for Oct. 25 in Ukraine.

U.S. President Barack Obama also sounded a skeptical note, saying a ceasefire could only work if Russia owned up to the role it has played in the conflict.

"No realistic political settlement can be achieved if effectively Russia says we are going to continue to send tanks and troops and arms and advisers under the guise of separatists, who are not homegrown, and the only possible settlement is if Ukraine cedes its territory or its sovereignty," Mr. Obama told a news conference in the Estonian capital, Tallinn, his last stop before attending the NATO summit in Newport.

Russia has consistently denied that its military is involved in eastern Ukraine, even as video evidence has emerged of at least one large column of Russian tanks and troops joining the fray. Russian journalists have been beaten for trying to report on the secret burials of Russian soldiers killed fighting in Ukraine.

The outlines of Mr. Putin's plan suggested capitulation by Mr. Poroshenko, who had previously vowed not to deal directly with the rebels. However, the Ukrainian position has weakened dramatically over the past two weeks after the direct intervention of Russian forces and a statement by NATO deputy secretary-general Alexander Vershbow in Wales that there was no "red line" that Mr. Putin could cross that would cause the alliance to intervene militarily on Kiev's behalf.

"I imagine that in this situation the Ukrainian President had to accept some kind of agreement that de facto leaves the militiamen in control of much of the Donetsk and Lugansk regions," said Fyodor Lyukyanov, editor-in-chief of Russia in Global Affairs, a Moscow-based foreign-policy journal.

Mr. Lyukyanov said that Mr. Putin, with the rebels holding the military advantage, would only agree to a long-term ceasefire if he received guarantees from Mr. Poroshenko that eastern Ukraine, which is predominantly Russian-speaking, would receive wide autonomy – akin to the Republika Srpska that was created inside Bosnia-Herzegovina under the 1995 Dayton Accords, which ended the fighting in that part of the former Yugoslavia. Another possibility was an agreement to "freeze" the Ukrainian conflict along current lines, creating an unrecognized mini-state inside Ukraine – akin to the Trans-Dniester region of nearby Moldova – likely protected by Russian "peacekeepers."

Both options would be hard for Mr. Poroshenko to sell to a Ukrainian public that has experienced a surge of jingoism – including the formation of volunteer brigades preparing to fight the Russian "invasion" – since fighting in the east of the countrybegan in April.

But Ukrainian analysts say Mr. Poroshenko may have decided he needed at least a temporary ceasefire after Ukrainian forces – which two weeks ago seemed on the verge of victory, having surrounded Donetsk and Lugansk – suffered a series of heavy setbacks. following the apparent introduction of Russian troops on Aug. 27.

"We've had a military defeat. There's no two ways of talking about it. It is in Ukraine's interests to have some sort of ceasefire for a little while that allows some sort of regrouping of forces after the Russian invasion," said Mychailo Wynnyckyj, a professor at the Kyiv Mohyla Business School in the Ukrainian capital.

Despite the setbacks, Mr. Wynnyckyj said there was little public appetite for a long-term deal that left Russia or its proxies in control of eastern Ukraine. "At least in Kiev, there's certainly – looking at the mobilization of the various volunteer battalions – a significant amount of desire to continue fighting, because there's a principle of territorial integrity."

It was unclear how the apparent deal would affect the tone of the NATO summit, where leaders are expected to announce the creation of a rapid-response force, comprised of several thousands troops, plus the establishment of new temporary bases in eastern Europe. Both measures are intended to dissuade Mr. Putin from aggression in the Baltic states of Latvia and Estonia, which like Ukraine have large Russian-speaking populations.

"I think [the potential ceasefire] will be received with a degree of optimism and a sense of relief, but tempered in a significant manner by the realization that implementing various ceasefires and then breaking them is part of the way Russia has been undermining the Ukrainian state," said Tim Edmunds, a professor of international security at Bristol University in Britain.

He said NATO-Russia relations had been too badly damaged by the Ukraine crisis to be easily repaired. "In a sense, a line has been crossed. What's happened in Ukraine has changed the way the wind is blowing. What that means in terms of concrete measures by NATO members is another thing, but certainly in terms of rhetoric [toward Russia] there has been a sea change."

Also in question Wednesday was how long any ceasefire in eastern Ukraine was likely to last.

"We should not overestimate the inviolability of the current agreement," Mr. Lyukyanov said. "I don't think Putin is in a position to control everybody there [in eastern Ukraine]. I don't think Poroshenko is in a position to control everybody there."