By Natalia Zinets
KIEV (Reuters) - Ukraine's prime minister has launched what promises to be a bitter election campaign that could divide pro-Western parties and complicate their efforts to fight pro-Russian rebels in the country's east.
Prime Minister Arseny Yatseniuk, a key interlocutor of the West during months of turmoil, announced on Thursday he would quit, saying parliament was betraying Ukraine's army and people by blocking reforms supported by Western backers.
His move, following the exit of two parties from the ruling coalition, amounted to the start of a campaign for seats in a legislature still packed with former allies of pro-Russian president Viktor Yanukovich, ousted by protests in February.
"History will not forgive us," Yatseniuk told parliament on Thursday, in what analysts said was the first campaign speech for the party led by Yulia Tymoshenko, a rival of President Petro Poroshenko, who was elected to replace Yanukovich in May.
Pro-Western political forces in Ukraine have been bitterly divided almost continuously since the country won independence with the breakup of the Soviet Union in 1991.
Any further divisions will likely weaken Kiev's attempt to counter Russia's reassertion of control over the former Soviet arena, realised most dramatically when Moscow annexed Crimea from Ukraine in March, and they may also complicate talks with governments which lost citizens in last week's downing of a Malaysian airliner over eastern Ukraine.
Analysts said Yatseniuk's resignation - which has yet to be approved by parliament - would allow his party to criticise government policy during the election campaign.
"This resignation means that the election campaign has begun for all political forces," said Yuri Yakymenko, an analyst at the Razumkov think tank. "He suggested unpopular laws, but the Rada (parliament) did not support him. They threw it back at him and now he's throwing it back at them."
The Rada will now meet for an emergency session on Thursday, July 31, to discuss an investigation into the Malaysian plane crash and a vote of confidence for Yatseniuk as well as the budget and other legal amendments he had requested, a statement on Poroshenko's website said late on Friday.
"The collapse of the coalition ... should not paralyse the work of the parliament and is no basis for the dismissal of the government," the statement said, adding that Poroshenko hoped to continue working with Yatseniuk and his government.
Abandoning his post at a time when Ukraine is struggling to finance a war against pro-Russian rebels in eastern Ukraine and to pay state workers their regular salaries could be a high risk strategy for Yatseniuk.
Government and finance officials have warned that the budget only has enough money to finance the army until Aug. 1 and some have criticised the government for failing to properly feed or equip soldiers in the field.
An aide to Poroshenko, Oleksander Danilyuk, said the resignation should not hurt what Kiev calls its "anti-terrorist operation" against rebels in eastern Ukraine.
European Union ambassadors reached a preliminary agreement on Friday to push ahead with tougher economic sanctions against Russia following the downing of the Malaysian airliner in an area held by the separatists, who they say are backed by Russia.
A spokesman for Ukraine's Security Council said 13 soldiers had been killed in the last 24 hours, taking the total death toll to 325 since the start of fighting against the rebels who want independence for the eastern Donetsk and Luhansk regions.
In the rebel stronghold of Donetsk, witnesses said artillery fire could be heard from the direction of the airport for a third day on Friday. There were few people on the streets.
Local health officials said 14 people had been killed in the last 24 hours in the Donetsk region.
Northwest of the rebels' second stronghold of Luhansk, Kiev said it had taken the town of Lysychansk.
The war will be central to the campaign and Yatseniuk needs distance from government policy to form a campaign in opposition to Poroshenko's leadership.
Poroshenko, a pro-Western businessman who has been in various governments over the years, comfortably won the May presidential election, pushing Tymoshenko, a former prime minister jailed under Yanukovich, into distant second place.
Tymoshenko has seen her personal ratings and those of her party slip since she was imprisoned for abuse of office and she hopes Yatseniuk can help their party recover.
Ukraine's most popular political group is now the populist Radical Party, led by Oleh Lyashko, and the Udar (Punch) party of former boxing champion Vitaly Klitschko runs third in the opinion polls. Tymoshenko's party is second.
(additional reporting by Pavel Polityuk and Gabriela Baczynska in Kiev, Aleksander Vasovic in Donetsk, writing by Elizabeth Piper, editing by Philippa Fletcher and Gareth Jones)