Kiev is proposing that Ukraine become a Swedish or Austrian version of a demilitarized state that has its own armed forces, said Kremlin Aide Vladimir Medinsky, who leads Russia’s delegation at the talks.

"The preservation and development of Ukraine’s neutral status, a demilitarization of Ukraine, a whole range of issues related to the size of the Ukrainian armed forces are being discussed," he said.

"Ukraine is proposing the Austrian, Swedish versions of a neutral demilitarized state, which is a state that has an army and a navy."

"All these issues are being discussed at the level of the leadership of the Russian and Ukrainian defense ministries," Medinsky went on to say.

The negotiator said Ukraine holds neutrality at the moment. Neutrality is enshrined in Ukraine’s Declaration of Sovereignty and was the condition under which Ukraine seceded from the Soviet Union, he said.

"Certainly, the key issue for us is the status of Crimea and Donbass and some humanitarian issues including de-Nazification, the rights of Russian-speaking people and the status of the Russian language and so on," Medinsky said.

TASS