Russian-Ukrainian gas dispute is beginning to arouse fears in Europe as Russia's natural gas company Gazprom has halved supply over two days to Ukraine, through which about 80 percent of Russian gas to European countries is piped.

The gas row mainly focused on a 600-million-dollar debt that Gazprom claims from its neighbor.

The two sides failed at the last minute to sign a deal, under which they were to agree that Ukraine would pay its debt for Russian gas deliveries and that a new delivery scheme would be worked out.

Russia: Maybe a further cut

Gazprom cut one quarter of its gas supply to Ukraine on Monday, pressing Kiev to pay off the alleged debt.

The Russian gas monopoly announced another 25-percent cut Tuesday, bringing deliveries to half their normal level over Kiev's failure to pay its debt.

Gazprom spokesman Sergei Kupriyanov said Ukraine had consumed without Russian authorization around 1.9 billion cubic meters of Russian natural gas from the beginning of this year, worth some 600 million US dollars.

Gazprom also threatened further supply cuts as Kupriyanov said Tuesday "If Ukraine fails to return to the negotiating table, I cannot rule out that a decision will be made to further reduce gas supplies."

Meanwhile, the spokesman promised that Gazprom is continuing to supply gas to the EU in full, with gas shipments through Ukraine being monitored in Russia, Romania and Slovakia.

Russia's president-elect Dmitry Medvedev, who chairs the board of Gazprom, has urged Kiev to take steps in solving the issue during a Tuesday phone exchange with Ukrainian President Viktor Yushchenko.

Medvedev said Kiev must honor its commitments under an agreement reached with President Vladimir Putin in Moscow on February 12.