throughout the day, head to aljazeera.com. >> the latest trouble in ukraine is brewing for weeks. the crisis approached the breaking point overnight as police moved against the protesters in the ukraine capitol kiev. it was the rejection of a deal for closer economic ties with europe that sent protesters into the streets. it's a high-stakes drama and a flash point of the larger power struggle between russian president putin on one side and the united states and europe on

the other. on this edition of our program we're going to dig in to why all this matters for america. but we start on the ground in kiev's independent square. >> for more than two weeks demonstrators have rallied against the government in the ukraine's capitol kiev. in the middle of the night riot police moved into independent square. >> we're standing here, but we're moving. we're moving forward step by step, we're going forward. everyone makes a big effort for our country, for our families, and the whole world is watching ukraine. >> in freezing conditions the police pushed and shoved their way in the square trying to remove barricades and tents. protesters pushed back for hours chanting shame while those in occupied buildings dumped ice cold water on approaching police.

finally the authorities pulled back. the government claimed they only wanted to restore traffic downtown. protesters are protesting against the decision of president yanukovych's decision last month not to sign trade agreements with europe . [ inaudible ] >> reporter: following her meeting ukraine's president, the secretary of state victoria youlin sai said she told president ca yanukovych. >> i told him it is impermissible in an european state, in a democratic state. >> reporter: ukraine is in on

the brink of bankruptcy, and it is home to more than 40 million people. as the country wrestles with its economic problems it's caught in a new post cold war struggle between russia and the west. al jazeera's robben forester walker is in kiev tonight. >> reporter: tens of thousands of ukrainians are packed back in to independent square. developments are moving along the president yanukovych said he is willing to sit down to talk to have a national dialogue with leaders of the opposition and those political parties. but they're dismissing these proposal s. >> those talks, should they happen, will be closely watched in brussels as well as moscow and washington. joining us now damon wilson executive vice president of the

atlantic council and former senior director for european affairs for the national security council. from stanford, katherine stoner political scientist and senior fell on democracy, development and rule of law at stanford university, and back in the studio, william miller, u.s. ambassador to ukraine from 1993 to 1998. let's go back to the 90's, mr. ambassador, it looked like for a while the ukraine had managed the trick of making the transition from a post self yet soviet state that could stand on its own. they worked out deals with the arsenal, soviet navy, territorial pursuits, the ukraine for some time looked like it was ready to become an independent country. >> it was first in line, but unfortunately the politicians in charge tried to play both sides against each other. east and west.

and they lost their way. but more significantly the leadership of ukraine initially was soviet. soviet in background and soviet in mentality, and soviet in behavior. and it's only now that we're beginning to see the generation that it was born after independence. it was not brought up in soviet ways, and is definitely on track to become a democratic nation. >> katherine stoner, are we watching ukraine art the precipice trying to figure out if it wants to be more like poland or it's next door next-door neighbor

belarus. >> it's broadly reflective of the country, which in and of itself quite divided, east and west. the eastern part of ukraine is drawn more towards russia and is predominantly russian speaking. the western part speaks ukrainian, which is a distinct language from russian, and it is more european minded, considers itself to be part of europe. in part that is part of the struggle here. the other thing, too, is that this is a deal that was in the works for a number of years, about five or so years. and throughout this yearn coyanukovych, the president, sad repeatedly that he would sign it. why you're seeing this rush to the street is that it's the change of heart seems quite sudden, and it seems as though it's a turn towards russia, as you said at the beginning of this segment.

>> what is at stake? why is it so important for the world, and why is russia so keen to have ukraine back in the fold. the e.u. looking at ukraine to look out for itself, and the secretary of state giving a stern lecture to the president. >> there is a lot at stake. ukraine, as in your introduction, it's the largest country by geography in europe. 46 million some people. this is a major player, a major country. what is a stake where vladimir putin can succeed in reconstitute a more modern version of control and influence over the former territory of the soviet unity, what is at stake is whether a post soviet country can succeed in creating it's path and moving towards europe. for many years ukraine was moving in that direction, and

then president yanukovych reversed that direction and stopped it. whether russia will allow countries on its borders who used to be part of the soviet union, pick their own destiny, pick their own relationship, or try to pull them back to the eurasian authority. >> you'll see clothes factories, industries, and the system that gave a lot of jobs to russian and ukrainian speakers, those are not 21st century industries. won't they see a future that involves a frightening transition to this new borderless capitalism? >> no doubt there is a short-term challenge.

in some respects that's what forced the hand of president yanukovych. he's weighing short term, ukraine could go bankrupt in the next couple of months, and the crisis could only accelerate that. he could turn to a country like russia even china, to get short-term cash, reduced energy prices to sustain the industry you've referred to. that's a matter of short term paying off some of the structural pain of trying to adapt ukraine's economy to a global economy. that's the prospect of the deal he had with europe. yes, it was going to require transition but it offered the prospect and lots of research has shown that it offered the sustainable growth and jobs over time and he has been weighing off the short-term costs and pushing away--pushing back on exactly that fear of having to

take painful decisions which would have come in the context of a deal with the international monetary fund, higher energy prices. >> katherine stoner, you wanted to say? >> yes, the other issue, too, well looking at the european union, which has its problems, the irarussian economy has its problems as well. they believe that it has reached its maximum productive output. it has gone from growing 8% to 10% a year between 2001 and 2008 to growing about 1.4% by the end of this year. russia has obviously some big things to offer in particular ukraine's gas supply. and it's not afraid to turn the gas supply off. it has done that in the past with ukraine.

it could also jack up those gas prices. so here we are in the middle of december, and ukraine gets pretty darn cold over the next month or so. gas is turned off, that means home heat something turned off. yanukovych, i would say, has been black mailed into this situation by vladimir putin and his administration as your other guests mentioned has become increasingly bullying in its determination to reconstitute some eurasian union, not exactly the soviet union. over formeother former self yet membs has been bullied. moldova did not, and their wine imports to russia were promptly stopped at the border. so they're not allowed to come back really to rejoin the russian market having chosen europe.

ukraine looks at that and yanukovych is concerned about this. he's up for re-election in 2015, so the fact that the ukrainian economy is in the tank. unemployment is likely to go up is a big concern for him and perhaps why he's more focused on short term rather than long term. >> when we come back after the break we'll talk to ambassador mill behavior the tough choices facing all the players in this triangle. you're watching inside story.

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and now more americans are getting the high quality, original, in-depth reporting al jazeera america is known for. >> to find out more about al jazeera america go to aljazeera.com >> you're watching "inside story." i'm ray suarez. we're talking about the protests in ukraine. the white house strongly condemn the action against demonstrators and urge the country to return to the path of integration. we want to hone in on the story and whether outside pressure --as we heard we have a society divided against ethnic russians, and ethnic ukraine s, mod dennizers versus traditionalists, and those who want to move towards europe

while others want to stay in the russian area. >> what we see coming out now not just in the secrets of kiev but across the country, an overwhelming sense of yes, the ukrainian people want the opportunity to have a less corrupt, more democratic society, governed by rules of law moving towards europe. yanukovych himself was preparing his country for that deal with the european union. and many thought he was ready to support the deal with europe. the ukrainians are driving this debate, but the outside world, the united states, europe, they do have influence. and if anyone understands this, it's yanukovych. in 2004 then candidate for president yanukovych he won through fraudulent means. that's what sparked the first

ukrainians out on the street. the pinpoint when the u.s. and colin powell went out and said the united states does not recognize the president as an co-simple as president of the ukraine. he had to come and strike a deal. >> well -- >> he understands the power. >> but i think this is a rather different situation because we don't have--he was actually quite legitimately elected i in 2010, and sampled those elections as free and fair. >> i think professor power s said no one has called that election into question. but whether it was a sign of

strength or weakness that he didn't drop the har hammer overt on those protesters and route them, as we have seen again and again, but went softly. >> i'm not sure that he went softly. i think the militia who were after all the parents of some of the kids on the street , were inching their way like sent centipedes going step by step. >> reporter: you could tell they had been given orders or had no stomach for a violent eviction of those protesters from the square. >> yes, i think it's the latter. they didn't have the stomach to kill their children. i think that's an aspect of decency and hope that yanukovych

will submit to reason, and change his approach. but i think the issue has been decided by the ukrainian people. they don't want people like yanukovych running their country. and i think if he doesn't leave before the elections in 2015, he will certainly lose the election at that time. >> professor, we're very close to the end of our time, if you can give us a quick response, that would be great. >> sure, i was going to say from my understanding from civic activists on the streets is that many of the security force who is have been brought in are actually from the south and east of ukraine and are russian speaking and don't necessarily know the kievites out on the streets. that would be in favor of the opposition, certainly one of their strategies to try to get

the militia to turn towards opposition to yanukovych and do what the ambassador is indicating, which is to withhold violence. i think there are different ways out of this. one is possibly turningan co-simple turning to the public and said, let's have a referendum, and if the referendum is in favor of the european you association, he can throw that back at putin, the other is spilling blood. he doesn't seem to have a tolerance for doing that yet. another thing that the protesters can do is call a national strike, and i see that happening next. >> we'll have to leave it there. thank you to all of my guests for the conversation. from washington, i'm ray suarez.

hell a welcome to al jazeera america. here with the top stories we're following at this hour. debate on the budget issue is set to start right now on capitol hill. the government could change the rules on cell phone use in flight. and the outrage over this man and what he didn't do at nelson mandela's memorial. ♪ good to have you with us, congress is now on budget talks. the house is set to begin