MOSCOW  - Russian President Vladimir Putin has ordered his defence minister to pull thousands of troops from the border with Ukraine, ahead of key talks on a fragile truce in the ex-Soviet country.

The announcement by the Kremlin late Saturday comes as the Russian strongman is gearing up to hold the talks with Ukrainian President Petro Poroshenko and European leaders in Milan on Friday, signalling the possibility of shoring up the rickety truce. Russia is facing its most serious international isolation since the end of the Cold War, with the economy in tatters, intensified capital flight and an increasingly weakening ruble following several rounds of Western sanctions. “The head of state has tasked the defence minister with beginning to bring troops back to their permanent bases,” the Kremlin said.

The order, the Kremlin said, meant that 17,600 servicemen, who had participated in summer drills in the southern Rostov region on the border with Ukraine, would be pulled back. Defence minister Sergei Shoigu received the order after reporting that “summertime training on military ranges of the Southern military district is over,” the Kremlin said.

The late Saturday meeting between Putin and Shoigu took place after the president chaired a meeting of his national security council at his Black Sea resident in Sochi, said the Kremlin, without providing further details. Kiev has reported that attacks by pro-Moscow rebels in eastern Ukraine have subsided.

The rebels and the Ukrainian military in the eastern Donetsk region said for their part they had agreed to a no-shooting period, and the army announced “progress” in negotiations and readiness to pull back forces.

Putin will meet Ukraine’s Poroshenko for talks on the sidelines of a Asia-Europe Meeting (ASEM) in Milan on Friday.

The talks - which will also address the two countries’ long-running gas dispute - will also include the prime ministers of Italy and Britain as well as German Chancellor Angela Merkel. “I don’t expect that these will be easy negotiations,” Poroshenko said on Saturday.

“We are very close to regulating the issue of the gas dispute with Russia right now,” he added.

Putin and Poroshenko last met one-on-one in late August in the Belarussian capital Minsk, after which Kiev announced a truce accord with the pro-Moscow separatists which has proven largely ineffective.

Ahead of Putin’s meeting with Poroshenko, US Secretary of State John Kerry will hold talks with his Russian counterpart Sergei Lavrov in Paris on Tuesday. Ukraine is expected to be high on the agenda.

Throughout the six-month conflict, which has killed more than 3,300 people, Russia has massed tens of thousands of troops on the border with Ukraine.

Moscow has repeatedly denied that it sent regular troops into Ukraine to prop up pro-Moscow separatists.

But rights activists representing the military and relatives of Russian soldiers say military commanders have used ranges in the Rostov region to deploy troops to Ukraine.

Some critics said the troop drawback meant that the Kremlin was keen to drop its support for separatists.

“The project Novorossiya (New Russia) is over,” former deputy prime minister turned opposition leader Boris Nemtsov said, referring to the loaded Tsarist-era name for what is now southern and eastern Ukraine.

Putin has used the term to refer to separatists, battling to mould Ukraine’s eastern regions into an independent statelet.

Nemtsov said the results of the Kremlin’s six-month campaign were “disastrous”.

Putin “wanted respect from the Ukrainian people,” Nemtsov wrote on Facebook. Instead “he has got an enemy for many years to come”.

Instead of winning international recognition, the Russian president “has become an outcast,” he added.

Ukrainian analyst Taras Berezovets said the troop pullback meant that Putin “had lost”.

“Novorossiya has been left to its own devices,” he said on Facebook.

Washington warned again on Wednesday that if Moscow does not withdraw its forces from eastern Ukraine more US and EU sanctions could follow.

The United States and European Union have slapped sanctions on Moscow for its annexation of Crimea from Ukraine, and its backing of the pro-Russian separatists.

In a sign that world leaders are keen to engage Putin in a further dialogue, Australia confirmed on Sunday that Putin would attend the G20 leaders’ summit in November.

“That has certainly been the consensus of other members of the G20 that President Putin should attend,” said Australian Treasurer Joe Hockey.