Russia and Ukraine appear to be back on the brink of war following an incident on the Crimean border that saw two Russian soldiers killed, but politics is more likely driving the flare-up in tensions. 

In the worst clash since September 2015, Ukrainian President Petro Poroshenko put Ukraine’s military in border areas on full combat alert. "I have ordered to put on full combat alert all units in the border areas with Crimea and on the contact line in Donbas," Poroshenko wrote on his Twitter account after a meeting with the leadership of Ukraine's security agencies and the Foreign Ministry, Tass reports.

In Russia, President Vladimir Putin called a meeting of the Security Council to address the issue and accused Kyiv of terrorism.

The Russian Federal Security Service (FSB) claimed it prevented acts of sabotage in Crimea that were being prepared by the Main Reconnaissance Administration of the Defense Ministry of Ukraine. It also claims that a group of these saboteurs were arrested near the city of Armiansk on August 7, during which shots were fired, killing two Russian servicemen.

Russia claimed that the saboteurs intended to destroy infrastructure in an effort to destabilize the peninsular ahead of Russia’s general election slated for September. The sabotage attempt allegedly involved 20 homemade explosives, armaments, mines, grenades and special arms, which are employed by special subunits of the Ukrainian Armed Forces, the FSB alleged.

Among the Russian and Ukrainian citizens arrested was 38-year-old Yevhen Panov, a resident of the Zaporizhia region who is alleged to have served the Defense Ministry. Kyiv confirmed Panov was among those captured but nothing more.

Putin lambasted Kyiv for “resorting to terrorism”, and saying it was playing “a very dangerous game”. He added that it would be “senseless” to participate in Normandy Format talks planned for September 4-5 on the sidelines of the G20 summit in Hangzhou, China.

In its response, the Ukrainian authorities denied planning any sabotage attacks and claimed the allegations were fabricated by the Russian government. Kyiv countered that no employee of the Main Reconnaissance Administration has been arrested, contrary to Russians claims, Defense Ministry official Vadym Skibitskiy told local television.

As for the claim that the sabotage attempts were backed by Ukrainian fire, the official said the Russians would have announced such attacks already on August 8 if they had actually taken place. Moreover, they would have fired back, given the accumulation of military hardware in northern Crimea. “These fantasies are merely a pretext for the latest military threats against Ukraine,” said Ukrainian President Petro Poroshenko.

“The Ukrainian government would have nothing to gain, and much to lose, from organizing a sabotage attack on Crimea,” says Zenon Zawada, an analyst with Concorde Capital. “Meanwhile, the Russians have a long and rich history of manufacturing narratives and incidents of Ukrainian aggression, as well as fabricating criminal charges against Ukrainian activists. Taking into account these two factors, we can only conclude that this is the latest Russian hoax that is timed to achieve some short-term political aim.”

Other commentators have pointed out that a flare-up in Ukraine gives Putin an opportunity to look strong ahead of September's Duma elections.

“Likely this is all linked to ongoing negotiations still over bringing a lasting peace in the East of Ukraine, plus State Duma elections in Russia next month, and the desire of the Russian authorities to show a level of high preparedness/efficiency against potential threats, ie. Only the incumbent United Russia administration can provide assurance against security challenges/risks. We have also recently seen some high profile efforts to crack down on elite corruption - eg with customs admin arrested in Russia,” Tim Ash, head of CEEMEA strategy at Nomura, said in an emailed note.

Anders Aslund, a senior fellow at the Atlantic Council, noted: “Although only Putin’s parties are allowed to win, he has a predilection for ‘small and victorious wars’ to mobilize his people.” 

The latest “Fear Index” shows that Russians are more worried about rising international tensions  than inflation, the state-owned Russian Public Opinion Research Center (VTsIOM) concluded from a poll at the start of this month. Concerns about inflation – long Russians’ biggest fear – was displaced from the top spot, falling from 21 to 17 points on a scale from no fear at zero to absolute fear at 100.

The military provocation could also be designed to counter Ukraine’s celebrations of 25 years of independence that Kyiv will celebrate next month.

Putin’s decision to drop out of the upcoming Normandy format talks has been taken by commentators to be a sign of his increased confidence in his showdown with the West, where resolve to confront Russia has been weakened by a string of disasters, including the Brexit vote and the collapse of relations with Turkey following the attempted coup there in July.  

“[Putin] might eventually agree to participate, but with concessions from the West,” Zawada  said. “We are confident that Putin is working behind the scenes to lift the sanctions imposed against his entourage through legislatures and elections, especially the U.S. presidential vote.”