Ukraine vows return to union with Crimea

We'll lift sanctions if Russia complies: Poroshenko
We'll lift sanctions if Russia complies: Poroshenko   

As the European Union announced a fresh wave of sanctions against Moscow, Ukraine's President Petro Poroshenko vowed Friday to reunite the Russian-held region of Crimea with the rest of the country.

The annexation of Crimea, which sparked a diplomatic crisis with the West, will be reversed not by military force, but by an "economic and democratic petition" Poroshenko declared.

Read MoreNATO: Russia 'attacking' Ukraine as rift widens

"We have a significant problem. They said we lost the Crimea. No, we had an invasion in Crimea - but Crimea will be back together with us," he said, speaking at the 11th Yalta European Strategy (YES) conference in Kiev.

Speaking to CNBC, Poroshenko said the key issue for Ukraine is its "independence, sovereignty and territorial integrity" as he called for the total withdrawal of Russian troops from the border.

Viktor Yushchenko, the pro-Western former president of the Ukraine, added that current relations with the Kremlin were in tatters as President Putin refuses to take part in discussions himself.

Ukraine's President Petro Poroshenko sings the national anthem during the Independence Day military parade, in Kiev, Aug. 24, 2014.
Gleb Garanich | Reuters
Ukraine's President Petro Poroshenko sings the national anthem during the Independence Day military parade, in Kiev, Aug. 24, 2014.

"It is impossible to negotiate with Putin, he is not even participating in the discussions. His puppets are talking instead of him," he told CNBC through an interpreter at the conference.

The EU put new sanctions into effect against Russia on Friday, including restrictions on financing from some Russian state-owned companies and asset freezes on leading Russian politicians.

Poroshenko said the sanctions showed Europe's level of solidarity with Ukraine in the face of confrontation with Russia.

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"I am proud to be Ukrainian. I feel myself a full member of the European Union family," he said.

The new sanctions mean 24 further people will be subject to travel ban and asset freezes, bringing the overall number to 119 individuals.

The YES conference, usually hosted at Yalta, is based in Kiev this year as Yalta is based in Crimea and so under Russian rule.

Ukraine needs military aid: Ex-President
Ukraine needs military aid: Ex-President   

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Like Poroshenko, Yushchenko was confident Ukraine can be reunited again but said the country needed more support first.

"Unfortunately we are witnesses of a he wall that is being built across Europe. This is a problem of two different systems of values. But altogether as a mosaic, as a puzzle all these things taken together will help us to win. Ukraine needs military and technical aid. We are talking about defensive weapons, we have to be more decisive on sanctions," he said through an interpreter.

Also attending the event was mayor of Kiev of former boxing world champion Vitaly Klitschko who ran again Poroshenko in the presidential election, before pulling out to back him.

"We want peace, but somebody doesn't want to do that. They have another goal to destabilize the situation and Ukraine – because they don't agree with us becoming a European country," he told CNBC.

The U.S. is set to follow Europe's lead and also implement fresh sanctions against Russia, focusing on energy finance and defence.

Read MoreFood prices hit 4-year low, Russia ban hurts

US sanctions to focus on key sectors: US ambassador
US sanctions to focus on key sectors: US ambassador   

Last week, former presidential candidate Senator John McCain urged NATO leaders to arm Ukraine and equip the country with intelligence and defensive weapons, branding the West's efforts to support the country's fight against Russian separatists so far as "shameful".

Current U.S. Ambassador to Ukraine Geoffrey Pyatt defended the Obama administration's stance and said the U.S. had given Ukraine $70 million in "security sector assistance" to date, but the solution to the crisis had to be diplomatic.

Read MoreWest must arm Ukraine to fight 'invasion': McCain

"We are going to continue to identify opportunities to help build the Ukrainians to defend themselves, but this crisis doesn't have a military solution, it has to be solved through diplomacy," he told CNBC.

Pyatt said new sanctions are also a "clear signal" to Russia that the U.S. is prepared to continue to "raising the price for Russia's unrelenting campaign of aggression against the Ukraine."

"It (Russia) is an economy that is tied to global markets, that is precisely why Russia is so vulnerable to these new sanctions, as long as we work jointly with our European partners. We want to engage Russia, but only on terms of respect for the independence and territorial independence of all of its neighbours, importantly including Ukraine," he added.

By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave