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Ukraines government will have to wait a bit longer for thethird installment of a $17.5 billion bailout from the International Monetary Fund.

Understandings were reached on most issues, Nikolay Gueorguiev, the IMF mission chief for Ukraine, said Saturday in an e-mailed statement after several days of discussions with the countrys officials. However, as the authorities still need more time to fully flesh out their policy proposals for 2016 in some areas, discussions will continue in the coming weeks.

Ukrainian President Petro Poroshenko said last month he expects the country will receive the $1.7 billion installment by November to replenish the central banks reserves.

Ukraine sought international assistance for an economy battered by an 18-month pro-Russian military conflict in its eastern industrial heartland. The government, which agreed with its main creditors led by Franklin Templeton on restructuring $18 billion of debt, needs the approval of other bondholders to complete a deal that would write down the principal by 20 percent. It also needs Russias backing because a $3 billion Eurobond the previous pro-Russian president, Viktor Yanukovych, sold to the Kremlin matures in December. Russia insists on full repayment on time.

In the statement, the IMF said it expects Ukraine to return to growth in 2016, with its gross domestic product up 2 percent as macroeconomic conditions gradually stabilize.

The IMF revised its forecast for 2015 to an 11 percent contraction from 9 percent previously due to Ukraines worse-than-expected economic decline in the first half, the Washington-based group said in an e-mailed statement. GDP fell 14.7 percent in the second quarter from a year earlier as the country was battered by a pro-Russian insurgency in its eastern industrial heartland.

A cease-fire between Ukrainian forces and the separatists has held since the sides agreed on Oct. 2 to a light-weapons withdrawal during talks in Paris. Ukraines central bank lowered its benchmark interest rate for a second straight month in September as a more stable hryvnia helped slow inflation.

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Ukraine Kept Waiting by IMF for Next $1.7 Billion Loan ...

MOSCOW International monitors say they have spotted a new kind of Russian weapons system in rebel-held Ukraine this week, possible evidence of Moscow's continued interest in Ukraine even as it focuses on Syria.

The Organization for Security and Co-operation in Europe, which is monitoring a ceasefire in eastern Ukraine, reported that its monitors had seen a mobile TOS-1 'Buratino' weapons system for the first time.

The Buratino is equipped with thermobaric warheads which spread a flammable liquid around a target and then ignite it. It can destroy several city blocks in one strike and cause indiscriminate damage.

Only Russia produces the system and it was not exported to Ukraine before the conflict broke out, according to IHS Jane's Group and the Stockholm International Peace Research Institute, which track arms exports.

The OSCE's findings are embarrassing for the Kremlin, which has turned down its rhetoric on Ukraine and shifted attention to Syria, where it has begun air strikes. The report comes before President Vladimir Putin holds talks in Paris on Friday with the leaders of Germany, France and Ukraine on the peace process.

The Russian defense ministry did not reply to written questions from Reuters about whether Ukrainian rebels were supplied with the weapon or where it had been exported.

Russia denies its military is even in Ukraine. But there have been numerous signs that Moscow backed the rebels with troops and equipment. Reuters reporters spotted two burnt-out tanks last year which military experts identified as Russian army tanks in rebel-held territory.

Alexander Hug, deputy chief monitor of the OSCE monitoring mission to Ukraine, told Reuters by phone monitors had spotted the Buratino at a rebel training area in the village of Kruhlyk.

"We saw the weapon on that training ground," Hug said. "Both sides agreed a year ago to withdraw heavy weaponry from the line of contact. Having them near the line of contact is of course a concern as this weapon should be in storage and not be used."

Hug said the weapons system was "indiscriminate and very destructive." The Popular Mechanics website called TOS-1 "hell on earth" for anyone it targeted.

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According to IHS Jane's and the Stockholm Institute's unofficial arms transfers database, Russia has only exported the system to Azerbaijan, Iraq and Kazakhstan.

Ukraine said it did not possess the Buratino.

"We have not got them and we have never had it in service," Vladislav Seleznyov, a spokesman for the Ukrainian military, told Reuters. "The Russian army has it. It was used against us in the area of Donetsk airport."

The Ukrainian defense ministry said on its website in March that the separatists had used seven TOS-1 Buratino systems and that one of them had been destroyed by its forces.

Fighting between Ukrainian government forces and the separatists in Ukraine's eastern Donetsk and Luhansk regions has killed more than 8,000 people since it flared in mid-April 2014.

But violence has ebbed in recent weeks to its lowest level since a ceasefire was signed in February, even though Western diplomats say the 12-point peace plan is far from fulfilled.

Rebel leaders this week signed an agreement to extend a withdrawal of weapons to include tanks and smaller weapons systems. A rebel representative said on Wednesday the agreement could mean an end to the conflict.

(Additional reporting by Pavel Polityuk in Kiev and Zlata Garasyuta in Moscow Writing by Andrew Osborn; Editing by Larry King)

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Guest post written by Adrian Bonenberger

Mr. Bonenberger was an infantry officer in the U.S. Army from 2005-2012 and served twice in Afghanistan. He is now a freelance journalist.

For those following Russias invasion of Ukraine, an ongoing source of concern is where Russia will draw the line. Common wisdom says if Ukraine continues to resist, Russia will commit more forces and overrun Ukrainepossibly continuing its momentum into Estonia or Poland. As members of NATO, an attack on either of those two countries risks invoking Article V, NATOs common-defense clause, thus drawingEuropeand America into war with Russia, inexorably leading to World War III and nuclear exchange.

Well, theres another cause for concern.

Ukraine is much stronger than people give it credit for. Up until now, the Ukrainians have been fighting with one arm tied behind their backmuch of their combat power has deliberately been held in reserve, to risk provoking Russia into allocating more forces to the fight. The last time the Ukrainian military mounted a calculated offensive against the separatists, in August of last year, it experienced quick success. Russia had to move thousands of soldiers across the border to shore up separatist resolve, and assisted the separatists with artillery, tanks and anti-air assets (including the Russian AA battery that shot down Malaysia Airlines Flight 17). Since then, there has been a status quo of sortsnot to be confused with a cease-fire, as casualties by the dozens occur every day. The battle in East Ukraine has reached equilibrium.

A Ukrainian serviceman walks along destroyed houses in Shyrokyne, Donetsk region in late June. (ANATOLII STEPANOV/AFP/Getty Images)

Many in the West believe that Russia can decide to break this status quo at any timewith a quick push; it can blitz through Ukrainian lines and make its way to Kyiv and Odessaor beyond. Ukraine is incapable of standing up to the Russians, and their defensive capabilities are barely adequate to resist an invasion. Presumably, conventional wisdom is the same in Russia because its military has not made any serious, concerted effort to overwhelm Ukrainian positions. Up to this point it hasmade strong probes against Ukrainian lines, or maneuvered to surround National Guard positions, andthen negotiated surrender with Ukrainian authorities.

But Ukraine does have sophisticated defensive capabilities, which are increasing with every day. The Ukrainian populationespecially Kyiv and parts of the West and Southfeels more and more invested in the struggle as friends and relatives are killed or wounded on the front lines. And Ukrainian military formations are training hard.

On the ground in Ukraine

I spent a week in Yavoriv recently, watching my old unit, the 173rd, train two companies of Ukrainian National Guardsmen (NGU). Itwas very impressive: Ukrainian soldiers moving and communicating tactically at a level that matched or exceeded most conventional U.S. units. Fornearly seven years, I served as an infantry officer (over two of which I spent in Afghanistan) in combat; in my time training Afghan police and soldiers, I never saw a unit of Afghans that looked as professional as the Ukrainians.

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Ukraine Can Defeat The Separatists

Story highlights Fighting erupts between Ukrainian forces and separatists in eastern Ukraine Five Ukrainian troops have been killed, and 12 others are injured, Ukrainian officials say

Twelve other Ukrainian service members were injured in the fighting in separatist areas of eastern Ukraine, the country's National Security and Defense Council said.

The violence happened despite a ceasefire that was agreed to in mid-February for Ukrainian forces and rebels who hold territory in eastern Ukraine's Donetsk and Luhansk regions, near the border with Russia.

It's an extension of a conflict that the United Nations says has killed more than 6,000 people since last year and forced 1.6 million people from their homes, including more than 600,000 who sought refuge in other countries.

Militants fired on Ukrainian forces more than 40 times Tuesday night in the Donetsk and Luhansk areas, according to the Ukrainian news agency Ukrinform.

That included artillery, mortars, tanks and small arms fire on Ukrainian positions in the Donetsk region, Ukrinform reported.

The Ukrinform report did not detail what led to Tuesday's fighting or how the Ukrainian forces responded.

Separatists and Ukrainian forces fought for months in the two regions last year and early this year, a conflict that led to souring relations between the West and Russia.

Western leaders and Kiev accused Russia of fostering the conflict by providing weapons and training to the pro-Russian separatists, as well as sending regular Russian troops over the border to fight. The United States and the European Union levied sanctions against Russia, which denied the allegations.

Unrest in Ukraine began with protests in the country's capital in 2013 after pro-Moscow President Viktor Yanukovych, favoring closer ties to Russia, dropped plans to sign a political and economic agreement with the European Union.

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Ukraine: 5 soldiers killed as ceasefire wobbles - CNN.com

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