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German Chancellor Angela Merkel speaks during the Christian Social Union (CSU) party congress in Nuremberg, Germany, December 15, 2017 REUTERS/Michael Dalder

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MOSCOW/BERLIN (Reuters) - Russian President Vladimir Putin and German Chancellor Angela Merkel spoke by phone on Thursday and agreed to work to try to create the conditions to allow Russian ceasefire observers to return to east Ukraine, the Kremlin and Berlin said.

German government spokesman Steffen Seibert said in a statement that Merkel had told Putin that Moscow should help to resolve the situation, while the Kremlin said it had been agreed that aides to the two leaders would draw up a plan to create conditions to allow the observers to return.

A Russia-backed separatist insurgency erupted in 2014 and the bloodshed has continued despite a ceasefire that was meant to end the conflict. More than 10,000 people have been killed, with casualties reported on a near-daily basis.

On Monday, the Russian foreign ministry said it was recalling officers serving at the Joint Centre for Control and Coordination (JCCC) in Ukraine, accusing the Ukrainian side of obstructing their work and limiting access to the front line.

That alarmed Ukrainian officials, security monitors and Kiev's foreign backers who warned on Wednesday that Moscow's decision could worsen the fighting in eastern Ukraine.

The Kremlin said in a statement on Thursday that Merkel had phoned Putin to ask why the Russian military observers had pulled out, and that Putin had explained that they had faced numerous obstructions and provocations from the Ukrainian side.

"The Chancellor emphasized that the functioning of this centre should be safeguarded," said German government spokesman Seibert.

Both leaders supported a planned prisoner exchange between Ukrainian government forces and pro-Russian separatists as well as a Christmas ceasefire, the Kremlin said.

(Reporting by Andrew Osborn in Moscow and Michael Nienaber in Berlin; Editing by Hugh Lawson)

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