USA still sees war in Ukraine

The US dampened hopes that Moscow would seek a diplomatic solution to the Ukraine crisis, as officials warned that the Russian military had pushed ahead with plans to invade the neighboring country over the past two days.

Russian Foreign Minister Sergei Lavrov on Monday raised hopes for a peaceful solution to the conflict, saying Moscow is ready to speak to the West about its security concerns and that there may still be a "way forward" in negotiations.

However, officials in Washington said Lavrov's comments, made at a televised meeting with Russian President Vladimir Putin, contradicted ongoing military preparations for an attack.

"We have taken note of his comments. What we have not noted is any signs of de-escalation. We have seen no tangible, real signs of de-escalation," said Ned Price, spokesman for the US State Department, on Monday.

"It remains unclear to us whether Russia is interested in taking a diplomatic route rather than using force," Price continued.

The cautious tone on a possible diplomatic breakthrough came as German Chancellor Olaf Scholz held talks with Ukrainian President Volodymyr Zelensky in Kiev ahead of his visit to Moscow and a meeting with Putin on Tuesday.

Zelensky temporarily shook markets after saying he had been warned that February 16 would be the day Russia invaded, while declaring Wednesday to be National Unity Day amid threats to the country.

However, Ukrainian officials later clarified that the remark was meant as a sarcastic joke. Zelenski's spokesman, Serhiy Nykyforov, said the president has commented on unsubstantiated reports in the media and social media that the invasion could begin that day, and has not responded to direct warnings from world leaders.

"This is of course irony and sarcasm," added Mykhailo Podolyak, an adviser in Zelensky's office.

The S&P and the tech-heavy Nasdaq fell to lows as investors dumped riskier assets in favor of safe-haven assets like US Treasuries following Zelensky's comments, but those moves had largely reversed by the close in New York.

Meanwhile, the US continued to prepare for a possible invasion, saying it would temporarily move its embassy in Ukraine from Kyiv to Lviv in the west of the country "as the build-up of Russian forces has accelerated dramatically".

Pentagon spokesman John Kirby declined to comment on a CBS report that Russian forces had taken up "attack positions" near the Ukrainian border, but said Putin had "been on standby" for the past 24 to 48 hours " further increased and could act "with little to no warning".

"He's doing everything you would expect him to do to make sure he's ready for that option," Kirby said. However, Kirby noted that Lavrov's comments "seem to indicate that [Putin] still believes there is oxygen for diplomacy here" and that the US "would welcome the Russians to continue down this path".

US Secretary of State Antony Blinken said late Monday evening that the US would increase its financial aid to Ukraine and offer a "government loan guarantee of up to $1 billion".

As US officials outlined Washington's response to Lavrov's comments, US President Joe Biden held a phone call with British Prime Minister Boris Johnson to discuss diplomatic efforts and an allied response to a possible invasion.

Earlier, Johnson had urged Putin to turn away from "the edge of the abyss" and warned that the "evidence was pretty clear" that Moscow was planning an invasion of Ukraine. "There is still time for President Putin to resign," he added.

The US and NATO members have so far failed to achieve a breakthrough with Russia after repeated disputes over the future of European security architecture. Moscow has urged NATO to abandon its "open door" policy for membership, particularly with regard to Ukraine, but the US and NATO have resisted this demand.

While the US has described the threat of a Russian attack as "imminent," Washington has yet to conclude that Putin has made a final decision on military action.

"The path of diplomacy remains open if Russia decides to engage constructively. Face