hello. i'm nik gowing with bbc world news. our top stories. the war of words over eastern ukraine is heating up as russia says it won't respond to one sided demands from the united states. president barack obama is in seoul. it's feared north korea could be preparing a fourth nuclear test. the duke and duchess of cambridge have paid respects to australia's war dead on the 99th anniversary of the landings. and ryan gigs speaks for the first time since he was made

temporary manager of manchester united. >> it was tuesday when i spoke to him. he informed me david was leaving and asked me to take over. it's been a whirlwind week for m me. hello everyone. ukraine's interim prime minister has accused russia of being ready to start world war 3 by stoking a conflict that could spread to the rest of europe. kiev, he says, russian troops became within a kilometer. using unusually blunt language, secretary of state john kerry

accused russia of actively coordinating unrest across eastern ukraine. >> this is a full throated effort to actively sabotage the democratic process through gross external intimidation. russia has put its faith in distraction, deception, destabilization. for seven days, russia has refused to take a single concrete step in the right direction. >> russian language is equally tough. these are ukrainian troops in the east. moscow says the u.u8 separatists in the east of ukraine. russia's minute lavrov has

bbc has been traveling around eastern ukraine. i spoke to her in the city of donetsk as she just visited mariupol in the southeast of ukraine, very close to russia. i asked her what she'd seen. >> reporter: well we've been trying to follow reports constantly popping up on social media networks. yesterday it all started in the city. we're getting reports from the ukrainian antiterrorists operation. we're getting other reports from

other places as well. the important thing to remember is this is not just military maneuvers here. it's also a massive information war watching russian tv, incredible some of the stories and leads we get on it. it's not just the russian side. here's one example. >> here we are in mariupol headed to what is the mayor's office to see what's going on. why are you speaking english, that guy is saying? he doesn't want english. you're american spies. turn around. >> they're asking who is in control of this building.

they say people, we're in control of it. we have the minister of interior of ukraine saying ukrainians are in control. doesn't look like ukrainian forces are in control here. there's no sign of them anywhere. they said they caught someone from the right sector, you will tra nationalist sector group seen as the main enemy here. >> reporter: everybody here is convinced that western ukraine is flooded by fascist. she says it's full of fascist. everyone is fascist in kiev and

ukraine. i spent quite a lot of time in kiev but haven't actually met any there. >> you were in mariupol which is a port in the east of ukraine right up against the russian border. what is the conclusion you draw from those kind of meetings you from those kind of meetings you had thereñ close to the city 6nn hall? >> reporter: i think division of society all across the ukraine deep lly polarized. leaders are sending out mixedkf messages. the interior minister posted on his facebook page they had taken over the government building. turns out they hadn't. it was in the hand as of pro-russian protestors. that happens all the time. it shows how little control kiev has over the situation. it's similar to the propaganda war on the russian side moscow

is fighting here. >> quickly, can can i ask you, what evidence is there of what president putin said would be a very serious crime? >> reporter: none that we have found so far. i have been looking for evidence of prosecution of russian speakers here for a while now. we haven't managed to find any. there are people who are very fearful. there are people as you saw in that report, a woman saying she believes fascist are descending on eastern ukraine. people see united states as an aggressor and europe as an aggressor they genuinely believe there's a real threat. when asked for evidence, we have not managed to find any. >> the u.s. says it's not giving up on peace efforts in the east even though israel has broken talks with the palestinians. israel is deeply unhappy

palestinian authorities have signed a new deal with the group. the prime minister netanyahu told bbc he would never support the government if supported by them. we are in jerusalem. >> for the last nine months, secretary of state john kerry has been making one more push to settle the palestinian israeli conflict. it wasn't open ended. monday was supposed to be the deadline. for weeks it's been clear after 20 years of on off negotiations, yet another round of talks was failing. the officer of defense, i i asked netanyahu what was his alternative to the talks with the president? >> it depends on the palestinian leader. he made a decision. he made a decision instead of choosing peace with israel, he

made a pack with hamas. he can have peace with israel or pact with hamas. not both. >> palestinians say you continue to their land, that you're not serious. >> decades upon decades of the palestinians and others recognize the jewish state in any boundary. what happened yesterday was a tremendous reverse for peace. the palestinian president not only refused to recognize the jewish state, he embraced the people who called for the outright destruction of the jewish state. i hope he changes his mind. >> seven years after the palestinians bloody split, a sign he didn't expect or want from israel. other attempts to settle the differences, the president's faction have collapsed. there's no guarantee this one

will work. palestinians as much as ever don't believe israel really wants peace. >> it's an excuse to finally end the peace talks and continue with unaccountable process of land grab and settlement building and so on. i think that is disingenuous. he's not committed to peace. he's committed to greater israel. >> the long fight between palestinians and israeli, a week ago in jerusalem has been overshadowed by the turmoil in the east. all the issues that made this place so volatile for generations remains. that's why the americans have tried yet again to get them talking and why what looks like another failure matters. president barack obama has offered support for south korea on the second leg of his asian

tour with signs north korea could be preparing a fourth nuclear test. satellite images show increased activity near the test site. intentions remain clear. mr. obama has been holding a joint news conference with the president. this is what he said about north korea. >> perhaps we'll get north korea nothing other than greater isolation. we're united on the steps needs to take living up to obligationses. we're also deeply concerned about the suffering of the north korean people. the united states and south korea are working together to advance accountability for the serious human rights violations being committed by the north. >> president barack obama currently in south korea. let's move on with the business. aaron just joined me talking

about what the implications on this increasing tension in ukraine are for russia and ratings. >> do you know how to say not good in russian? i got a blank look then. i'm just asking. i know no but -- he's still staring at me. good morning. president putin admits sanctions are damaging russia's economy. the credit rating just a pinch above junk status. that's not good. the other main agencies have warned the deepening crisis in ukraine could certainly mean future downgrades in worthiness. loans for russia could become more expensive. that's it in a nutshell. cut the credit rating and it's more expensive to borrow for countries in the time the economy is already struggling. russian shaf's economy grew by

0.8%. there were a lot worse than expected. this year investors have pulled out $70 billion, more than all of 2013. investors are worried about what's going on with russia's economy. we'll have more throughout the day. let's talk about the french car giants known asp peugeot. over two years it lost $10 billion, forcing it to seek a bail out from a chinese partner earlier this year. later today, we're going to figure out whether the company is stemming the losses for the first three months of this year. persia hopes to turn around by cutting the number of models and take on rivals such as bmw and mercedes. also wants to take advantage of

its new chinese partnership to sell more in china. china, the biggest car market in the world. everybody tries to take advantage of china. we're going to have more on that throughout the rest of the day. finally good news from japan. battle to end more than a decade of deflation, consumer prices in tokyo rose at the fastest pace in 22 years in april. that annual inflation rate hit 2.7% according to preliminary numbers boosted by an increase in the sales tax. the japanese government raised the sales tax not long ago. all of this is an encouraging sign of policy makers to end two decades of deflation. lots going on on twitter. follow me. i'll follow you. tweet me. i'll tweet you back. get me at bbc aaron. more with business news. very good. >> very good.

>> no good. stay with us here on bbc world news. still to come, iron cuts state subsidies forcing fuel prices to rise by up to 75% suddenly.

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you're with bbc world news with me nik gowing. i have the latest headlines for you. war of words over eastern ukraine heat up. russia won't respond to one sided demands from the united states. president barack obama is ahv5 it's feared north korea could be preparing a fourth nuclear test. it's remembered one of the worst militaryç disasters of t world war. many are marking the day of the 99th anniversary of the landings. the operation was a doom add tempt to invade what is now

turkey. the idea to turn the tide in the great war. we now report. >> when all is said and can done -- >> reporter: a national ceremony by veterans, duke and duchess of cambridge. this they came to remember the thousands lost on the battlefield almost a century a ago. during the disastrous mission, the royal couple laid a wreath on the tomb of the unknown australian soldier, a symbol of this country's loss. more than 100,000 soldiers died on both sides. australia and new zealand lost 10,000 servicemen.

nowhere is that loss felt more than here. so they gathered to mark the start of that ill fated campaign on the 25th of april, 1915. >> the going down of the sun and this the morning we will remember them. >> reporter: australia and new zealand have a long and proud tradition of marking this day. the heavy loss of life has bound these two nations together to remember the thousands who gave their lives 99 years ago. bbc news. >> remembering the horror of gillipe. a move has seen fuel prices rise 75%.

drivers rush to fill up cars before the price went up at midnight. fuel prices have been among the lowest in the world making petro cheap area than bottled water. why? i'm joined now. >> the government has been trying to reduce the subsidies they pay which is huge every year. >> a cash issue? >> yeah. they've been putting up prices every year. they always fall behind the market prices. even though prices have gone up dramatically, still much cheaper than what you can buy in the neighboring countries. >> iran still a significant oil producer. why does it have to subsidize fuel? >> the production of the petrol and production of oil itself has high prices. if iran export the oil which is main revenue for iran, main

source of making. they can make it and use it elsewhere in the economy. as they pay as subsidies and keep the prices of petrol low, it also will damage the economy and will encourage some to smuggle the fuel to neighboring countries which has been going on many countries in iran. >> prices are almost double which is not the thing that's going to go down at all well politically. >> yeah, there's been nagging by people. last time -- when the first time the government decided to reduce the subsidies, there were some demonstrations, some people said the petrol stations on fire and everything. it went down much lower than last time. some people feel the pressure because the petrol prices in iran has a powerful effect on other prices.

everything will be sort of damaged by this hike of prices. >> what's going to be the impact on the iranian treasury of this, almost doubling the prices? were they actually running out of cash because of sanctions? >> the sanctions have put lots of pressure on iran's economy. revenues has been almost cut by 70 -- 60% to 70% in the past years. iran is struggling with meeting the demand and needs for cash. as a result of the reform, economy reforms, iran's government is paying cash to people as well. they have to to produce enough cash to meet those sort of demands as well. so all in all, iran needs the money. by reducing the subsidies, they hope to increase income to meet

all money they have to spend. >> thanks for explaining that 75% increase and the price of fuel in iran. now to football. ryan giggs has given the first press conference since being named interim manager days ago. he was replacing moyes who was dumped following the first season at mu. he'll try to put smiles back on the faces of the team's disspirited fans. >> it's been a frustrating season i think for everyone. you know, you win together and lose together. like i say, these four remaining games i want to bring some positivity back, put smiles on the faces. we've got three home games where it hasn't been great. i want to see goals, tackles, playsing t playsing taken on.

i want the passion that should come to a mu player. >> he seemed humbled and pretty overwhelmed. >> yes, but i think that's good for fans and why manchester united fans will like this is because everything fans want manchester to be, ever green, competitive, fast on the pitch, everything manchester united hasn't been this season under moyes. they were ordinary looking english premiere looking team. as you say, giggs is looking forward to his ten your as the manager. won't be a long one. possibly just four games remaining this season, maximum 12 points to be gained. i think what he wants to do and what manchester united want to do is take a step backwards, go back to what manchester united were when alex ferguson was in

charge. it's interesting giggs was asked, who was the first person you called? he said alex ferguson. if you were watching on tv, you saw alex often sitting in the stands watching. this ten

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bbc world news. our top stories. the war of words over eastern ukraine entense identifies. russia won't respond to the demands. it's feared north korea could be preparing a fourth nuclear test. the duke and duchess of cambridge pay respects to australia's war dead on the 99th

anniversary of the disastrous landings. ryan giggs speaks for the first time since they became temporary manager of manchester united. >> it was a shock tuesday when he informed me david was leaving. then asked me to take over. it's been a whirlwind week for me. hello everyone. ukraine's interim prime minister has accused russia of being ready to start world war iii by sparking a conflict that could spread to the rest of europe. those are his words. kiev said russian troops came about a kilometer of the board they are week. the heavily armed separatists

movement is in ukraine's center of donetsk. using unusually blunt language, secretary of state john kerry accused russia of actively coordinating unrest across eastern ukraine. >> this is a full throated effort to actively sabotage the democratic process through gross external intimidation. russia has put its faith in distractions, deception, destabilization. for seven days, russia has refused to take a single concrete step in the right direction. >> russia's language is equally tough. these are ukrainian troops in the east. moscow says the u.s. is doing nothing to stop kiev mounting raids against pro russian separatists here in the east. russia's foreign minister lavrov's blunt language has matched john kerry's statement. this is what he told a meeting of young diplomats in moscow.

mr. lavrov said ukrainians are waging a war on their own people. he called this a bloody crime and those that push the army to do that will pay, he said. i'm sure, and they'll face justice. he added russia is decommitted to deescalating in ukraine but will not agree to unilateral demands. east of ukraine remains divided. bbc natalie has been traveling around eastern ukraine. when she was many in donetsk, i spoke to her about where she had been in the southeast of the country close to mariupol, which is very close to russia. i asked what she discovered there in that port. >> reporter: well we've been trying to folsom of the reports that are constantly popping up on twitter and social media networks. yesterday it all started in the city.

we were getting reports with the ukrainian antiterrorist operation. we are also getting reports from other place as as well. the important thing to remember is this is not about military maneuvers here. it's a massive information war being forced watching russian tv incredible. some of the leads that never ma materialize. it's not just the russian side. here's one example. here we are in mariupol headed to what is the mayor's office to see what's going on. why are you speaking english, that guy is saying. he doesn't want speaking in english. you're american spies. can you turn around.

i'm asking who is in control of this building. that is still not clear. they say people, we are in control of it. we have the minister of the interior of ukraine saying that ukrainians are in control. doesn't look like ukrainian armed forces are in control here. there's no sign of them anywhere. they're saying they caught someone from the right sector that's the ultra nationalist kiev group seen as the main enemy here. let's go. >> everybody here is convinced that western ukraine is flooded by fascists.

every time they hear that. this lady was saying it's full of fascist, everyone is fascist here in kiev and ukraine. i spent a lot of time there and haven't met fascist. >> you were in mariupol, the port of the eastern ukraine next to the russian border. what are conclusions you draw from meetings you had there close to the hall? >> reporter: i think division, society all across eastern ukraine deeply polarized. leaders are sending out completely confusing messages. the reason we went to mariupol was because we heard the interior ministry posted on his facebook they have taken over the government building. turns out they hadn't. it was many in the hands of pro russian protestors. that happens all the time. it shows how little control kiev has over the situation here.

it also is very similar to the propaganda war on the russian side that moscow is fighting here. >> quickly, can i ask you what evidence of what president putin said would be a very serious crime? >> reporter: none that we have found so far. i have been look for evidence of prosecution of russian speakers here for a while now. we haven't managed to find any. there are people very fearful. there are people as you saw in that report. there are people, a woman saying she believes fascists are descending on eastern ukraine. people see united states and europe as an addreggressor they genuinely believe there's a real threat. when asked for evidence, we have not managed to find any. now to the korean peninsula

where president barack obama has been meeting the south korean president park on the second leg of his asian tour. he offered condolences over the ferry disaster last week. more than 300 people are believed to have died, most school children. u.s. president arrived in south korea at a time of growing evidence the north is preparing to conduct a fourth nuclear test. mr. obama has had a joint news conference with president park. this is what he said about north korea. >> the united states and south korea stand shoulder to shoulder in the face of accepting the threats from north korea. threats will give north korea nothing other than greater isolation. we're united on steps they need to take on banning nuclear weapon programs and living up to national obligations.

we're deeply concerned about the suffering of the north korea people. the united states and south korea are working together to advance accountability for the serious human rights violations being committed by the north. i mentioned to president park the united states supports the korean's people desire for unification. i share president park's vision. as you outlined madame president in your speech, the threat free from war and nuclear weapons. >> next stop for president barack obama is malaysia. he is hoping to win hearts and minds and establish closer trade ties. but how? we look at who wins and who loses when free trade is on the table. >> reporter: on the verge of becoming rich, malaysia was once a fast growing economy before it was struck by financial crisis.

there's hope that a free trade agreement could get them moving again, but there are big challenges to overcome. media entrepreneur want as to see his country tackle them. how did businesses like his see the future lying beyond malaysia's borders operating in a country of only 30 million? he needs overseas markets to grow. >> the challenge really has been -- you know we've been mediocre for a long time. it's time to get on wicatching the rest of the world. corruption and stuff likekíuf is holding us back. we need to get our act together and move on. >> reporter: those at the top have already benefitted from malaysia's growth. the country as a whole can win if it opens up to trade alinks

with the biggest markets in the world. problem is there will be some who lose. ethnics have been protected by the government through affirmative action programs that give ownership of key industries. it's where the accusations stand. they're pushed to the free trade agreement. >> it's high concern for us. i think many the trade negotiations, they are generalizing the issues understanding the complexity of the economy development in the country. >> reporter: trade deals take years to agree. as the united states negotiates with the big players in asia like japan, it's not equal partners for malaysia. the little guy normally doesn't

get to lead. bbc news kuala lumpur. >> the u.s. says it's not giving up on peace efforts in the middle east even though israel has broken talks with the palestinians. israel is deeply unhappy palestinian authorities have signed a new deal with the group. the prime minister netanyahu told the bbc he will never negotiate with a palestinian government if supported by the group. the bbc is in jerusalem. i asked for reaction from the israeli and palestinian meeting. >> this is the subject that dominates the newspaper headlines in israel. if you look at israeli newspapers first, this is the jerusalem post with a straight forward headline, israel calls off talks with palestinians. there's a bit of analysis from the head of the world jewish congress. the reading is the world has seen the view of the president of the world jewish congress,

the palestinians are not serious about peace a. there's a slightly different approach in this, the widest circulation daily newspaper in israel. this has an image on the front page if if you can see, the head of the palestinian president with. the hamas president in garza. reconciliation, punishment is the simple headline. it says underneath negotiations suspended of course as we know. from israel, there's the newspaper that generally supports the prime minutes administer netanyahu. some speculation about what will happen now in terms of punishment measures that were threatened by the israel security cabinets. slightly different approach when it comes to the left wing newspaper. this is the english edition. it talks about the agreements

between the factions may fall through it says. there's also analysis here. hamas ready to talk with israel. jerusalem has to stop making excuses if it wants to find out. that's the israeli newspapers and quickly the bbc jeremy bowman included talking to the prime minister, netanyahu, one of the few international journal u. ists to do that. >> what about the talks between the two, this could have been the outcome? >> indeed. here's it's the approach if you look at the palestinian newspaper others. quickly it talks about how israel frozen negotiations. the overseas negotiations is said to be studying all of the options. the newspaper too, this one a

little more intriguing, talking about how the palestinian president may now go to garza within days following this reconciliation deal with hamas. also quoting an official who headed the delegation to garza saying to expect surprises in the next week. a reminder that's really a developing story we should expect to hear more. >> yolanda in jerusalem. you're with bbc news with me, nik gowing. more news to come. we reveal how black middle classes have moved up in the world next. ♪

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you're with bbc world news with me, nik gowing. i have the latest headlines for

you. the war of words over east ukraine intensifies. russia says it won't respond to one sided demands from the united states. president barack obama is now in seoul. it's feared north korea could be preparing a fourth nuclear test. almost seven weeks since flight mh 370 disappeared on route to beijing, a massive air and underwater search has failed to discover what happened to the plane or why. most passengers on board were chinese. many relatives are still staging a protest outside the embassy in beijing. our correspondent has been speaking to some of them. >> reporter: the malaysian embassy is located around the corner. this is as close as we could get. 80 family members have been camping out across from the embassy. this is the second time family

members, people with relatives aboard the missing plane, have protested outside the embassy. demands are the same. they want more contact with the malaysian government and want to be more involved in the search for the airplane. to the relatives frustration, embassy officials stop attending daily briefings. airline employees don't have the authority to answer questions. >> translator: the malaysian authorities have been searching the for the plane for 49 days but we feel like we have been waiting for information for 49 years. >> translator: we do not believe a single word said by the malaysian government. the malaysian government has never told us truths or kept any promises. >> relatives have been telling us they don't trust or believe the malaysian authoritys. they think they're withholding information on the plane's disappearance.

their hope today, desperate hope now, by increasing contact with high government officials they can work together to end the search for the plane once and for all. bbc news beijing. other news at this hour. scientists say they've succeeded in deciphering the genetic code of the fly opening the way to combat the deadly disease spread through microscopic pair sites. the insects found in africa, the carrier of human sleeping sickness and cattle disease. a passenger on a flight has been arrested after sparking a hijacking alert. the plane was on a scheduled flight when the passenger tried to get into the cockpit. the passenger was drunk. all other passengers were taken off safely. the plane was safe. the country celebrates 20 years of democracy. this is known as freedom day.

black south african as were able to vote. 20 years own they're seeing misfortunes transformed. here's bbc. >> we are driving in his rolls royce. he made money through coal mining. he used to be a goat header. he persevered against all odds. he now holds a phd in chemistry. looking back, could he have managed to achieve this before the democracy? >> i do not believe i would have been able to reach the pin kal of my achievements. there were times growing up i had no home to call mine.

sleeping outside like you see today. >> reporter: observers say south africa's democracy has the greatest asset, it's people. >> no matter how educated you were, you were not allowed certain jobs. in 20 years we have achieved by way of structure what a lot of nations take hundreds of years to develop. it's really accelerated. >> it would have been unthinkable to see this, a young black couple house hunting here in a former white only suburb. they're proud of achievements but also feel guilty for those they left behind.

>> i've got cousins that go to the same school my father went to and didn't have the option or opportunity to go to the school i went to. it definitely does bring about its own set of problems. >> you feel sometimes you not black enough. yes. >> there are millions of south africans still unemployed in poverty. levels are still high. by in large, there are middle income people who are moving into these suburbs because of high levels of education and also because the color of their skin does not exclude them from coming here. south africa's black middle class has caught up with the white counter part especially in education. not only is it bigger in size but it has a bigger spending power than any other group. bbc news johannesburg.

ryan giggs has given the first press conference since he found himself temporary manager of manchester united. david moyes was sacked tuesday after he failed to qualify for the competition costing tens of millions of in revenue. giggs says he will try to put smiles on the faces of team fans. >> it's been a frustrating season for everyone. you win together and lose together. like i say, these four remaining games i want to bring positivity back, put smiles on the faces. we have three home games. our fans have been great. i want to see goals, tackles, players taking plays on. i want to get the crowd up, the passion that should come with being a manchester player. finally prince william and

his wife duchess of cambridge on their way home after the tour of australia and new zealand. the royal couple along with george took off from the air force base in cambria. the duke and duchess served the public in the capital as they marked the day of remembrance . royals have been away ten days. here's how they spent some of tlq(nñ

he is in the middle of the toys. he had the biggest toy. he owned the place. >> for them to come all this way to say hello especially to my children and to us, to say i'm sorry this happened to you.

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hello. you're watching "gmt" on bbc world news. i'm tim willcox. ukraine's prime minister accuses russia of wanting to start world war iii accusing moscow of russian troops are reported to have come within a kilometer of the border. amid rumors the leader is preparing a fourth nuclear test, president barack obama speaks. >> in the face of