NATO allies on Sunday urged the deployment of international observers to Ukraine and said the alliance sought "to engage" with Moscow at NATO-Russia talks.

"We urge both parties to immediately seek a peaceful resolution through dialogue, through the dispatch of international observers under the auspices of the United Nations Security Council or the OSCE," said a statement issued after almost eight hours of talks between NATO's 28 ambassadors.

NATO condemned Russia's military escalation in Crimea and expressed "grave concern" about the Russian parliament's authorisation to deploy armed forces in Ukraine.

Any such action would be "a breach of international law" and would contravene the principles of the NATO-Russia Council and NATO's Partnership for Peace, it said.

The allies also said the NATO-Ukraine Commission had met at Kiev's request, adding, "we intend to engage with Russia in the NATO-Russia Council."

Asked to elaborate, NATO chief Anders Fogh Rasmussen said many members had asked for a meeting with Russia and that there would be one, but he gave no timing.

The statement called on Russia to "honour all its international commitments, to withdraw its forces to its bases, and to refrain from any interference elsewhere in Ukraine.

"We urge both parties to immediately seek a peaceful resolution through dialogue, through the dispatch of international observers under the auspices of the United Nations Security Council or the OSCE," the allies added.

They called also for "an inclusive political process in Ukraine based on democratic values, respect for human rights, minorities and the rule of law, which fulfils the democratic aspirations of the entire Ukrainian people."

Tense standoff as armed men surround Crimea base in Ukraine
Perevalne, Ukraine (AFP) March 02, 2014 - Defiant Ukrainian troops were in a tense standoff Sunday with hundreds of armed men believed to be under Russia's orders who had surrounded their military base in the flashpoint peninsula of Crimea and demanded their surrender.

Dressed in green military fatigues and carrying automatic rifles, the gunmen wore no official insignia but pro-Russia supporters nearby welcomed them with open arms, leaving little doubt as to their allegiance.

Hundreds of other mysterious gunmen have seized key government buildings and surrounded other military bases in this Russian-speaking autonomous region that has been thrown into disarray since the ouster of Kremlin-backed Viktor Yanukovych last month.

And in a dramatic turnaround Sunday, Ukraine's navy chief Denis Berezovsky switched allegiance to the pro-Russian authorities of Crimea, fuelling fears that the peninsula is sliding out of Kiev's grasp.

Ukrainian officials said the armed men had arrived at the base near the village of Perevalne, which hosts the 36th Coast Guard Brigade, in the early morning Sunday.

"The (Ukrainian) troops were given an ultimatum to lay down arms, leave their posts and open the gates. The servicemen refused to violate their oath," Vladyslav Seleznyov, a local defence ministry spokesman, told Ukrainian television.

The defence ministry said 1,000 armed fighters and around 20 trucks were outside the base near the small village of Perevalne, about 30 kilometres (20 miles) southeast of Crimea's regional capital of Simferopol.

"There is the risk of an assault," it said.

An AFP reporter saw several hundred of the armed men stationed along the road leading to the base in Perevalne and outside its concrete walls. Parked in a row in a field nearby were about 30 military trucks which contained more troops.

The standoff is one of several reported across the peninsula since Moscow approved plans to dispatch troops to Crimea on Saturday, sparking fears of a full-scale Russian invasion.

Moscow has reacted in anger at the ouster of Yanukovych following days of bloody violence in Kiev that capped three months of protests against his rule, and at the formation of a new, pro-Western government it refuses to recognise.

At the Perevalne base, three Ukrainian soldiers wearing traditional fur caps were standing guard behind the black gate blocking the entrance to the base, a Ukrainian flag still flying outside.

The standoff was tense but peaceful, with curious residents gathering around, some taking pictures with the men surrounding the base.

At one point about 40 of the armed men marched up to the gate of the base, spent a few minutes posing for cameras, and marched straight back down the road.

A woman in her 20s and a boy aged about five posed for a picture with one soldier, who proudly raised his rifle for the camera.

"Russia has always defended us," said the woman, who refused to give her name.

About 50 local residents had gathered near the gate, most of them backing Moscow's actions.

"I am here to support the Russians," said 66-year-old Nikolai Petukhov, dressed in faded military fatigues and waving a Russian flag.

"They gave this land to the Ukrainians but it is a historical part of Russia. Crimea is Russian," he said, referring to the Soviet Union's handover of the strategic Black Sea peninsula to Ukraine in 1954.

Petukhov said he supported plans announced by the region's lawmakers, who deposed the Kiev-appointed prime minister on Thursday, for a referendum on March 30 to determine whether residents want greater autonomy for Crimea.

"I want a referendum.... I don't think there will be war. We want a democratic decision on the status of Crimea."

Others at the gate were there to back the Ukrainian soldiers inside the base, including Dzhalil Ibragimov, a man in his 30s wearing an Olympic jacket from the Ukrainian national team.

"I am a Crimean Tatar, a citizen of Ukraine. We came here to show our support to the men who swear allegiance to Ukraine," he said.