Russia now recognizes the Luhansk and Donetsk rebel areas of Ukraine as independent.
The message came from President Putin in a televised speech.
He also said that eastern Ukraine is "historic Russian land".
Bert Sundström, based in Kiev, believes that Russian recognition can mean two things - including that the peace negotiations are in full swing.
But it can also mean that there will not be a full-scale war.
- If Russia recognizes these as independent, it is difficult to see why Russia should join the army to occupy further parts of Ukraine.