Russia pulled back a battalion from along the Ukrainian border on Monday and sent its prime minister to shower promises on Crimea, pledging quick funds to improve power supplies, water lines and education on its newly annexed peninsula.

In Kiev, meanwhile, Ukraine’s acting president flatly rejected Russian pressure to turn Ukraine into a loose federation. Other countries like Estonia fear they will be the next country to be invaded by Russia.

“Russia’s leadership should deal with problems in the Russian Federation, and not with Ukraine’s problems,” Ukraine’s acting president Oleksandr Turchinov said. “It is Ukrainians that should dictate the form of the new constitution and how the country is structured.”

Toomas Hendrik Ilves, president of Estonia, told Kent State students last Tuesday that for many countries formerly members of the Soviet Union, Russia is a huge source of income, which means that they cannot sever ties and implement sanctions against Russia.

“The more a country’s well-being is tied to Russia, the less willing they are to undertake any kind of action,” Ilves said.

Russia’s takeover of Crimea, a strategic region on the Black Sea, and its attempts to compel constitutional changes in Ukraine have markedly raised tensions with the West and prompted fears that Moscow intends to invade other areas of Ukraine. The concerns were stoked by the large numbers of troops Russia had along the Ukrainian border for what Moscow said were military exercises.

Viktor Kryzhanivsky, Ukrainian Ambassador to Estonia, told students at Tallinn University of Technology (TUT) in Estonia March 19 that Ukraine was preparing a for a full scale war with Russia. He said Ukraine—who refuses to recognize Crimea as part of Russia—had prepared its own army without international military assistance.

The German government said Chancellor Angela Merkel and Russian President Vladimir Putin talked on the phone Monday and Putin told her that he had ordered a partial withdrawal of Russian troops from Ukraine’s eastern border.

One battalion that had been sent to the Rostov region next to Ukraine was being withdrawn to its permanent base in the central Samara region, Russian news agencies quoted the Defense Ministry as saying; a battalion is about 500 troops.

Alexander Rozmaznin, deputy chief of the Ukrainian armed forces command center, separately confirmed a drop in Russian troop numbers along the border.

Russian Foreign Minister Sergey Lavrov and U.S. Secretary of State John Kerry also discussed Ukraine by telephone on Monday, a day after holding talks in Paris, the ministry said.

In Crimea, Russian Prime Minister Dmitry Medvedev, who led a delegation of Cabinet ministers on a surprise visit, pledged that Russia will quickly boost salaries and pensions there and pour in resources to improve education, health care and local infrastructure.

Russia annexed Crimea from Ukraine in March after a hastily called referendum held just two weeks after Russian forces had taken control the Black Sea region. Ukraine and the West have rejected the vote.

“I think that what Russia did was wrong,” said Laura Kajanus, an Estonian student studying at Tallinn University of Technology. “And to me, there is still war conflict and it’s (Crimea) not something that is to be sold, and I hope we Estonians are safe. It was wrong, and I support Ukraine. I hope the Baltic countries have no fear of Russia.”

The annexation after Ukraine’s pro-Russian President Viktor Yanukovych was ousted in February following months of protests. Russia claims the ouster was a coup and that the new Ukrainian authorities are nationalist fascists who will abuse Ukraine’s large ethnic Russian population. The new government notes that Yanukovych himself left the country for Russia and there has been no harassment of Russian speakers.

Aleksander Zinojev, a student at Tallinn University of Technology, said with many ethnic Russians living in Estonia, he fears a similar situation could unfold.

“In the east of Estonia, the population is almost only ethnic Russians, and ethnic Russians don’t consider themselves Estonians,” he said.”I am also a member of the Estonian Defense League, and they started to take exercise and preparations quite seriously because there are possibilities one day of Russians coming and starting integration in Estonia.”

Ilves said he thinks life is better for ethnic Russians living in Estonia compared to those living in Crimea.

“A lot of silliness has been written by people who have no clue about Estonia,” he said. “Why would someone say I’m going to give up the Euro and have the Ruble? If you are a permanent resident of Estonia, you can go anywhere in Europe.”

To keep its influence over eastern and southern Ukraine, which are heavily populated by ethnic Russians, Russia has pushed for Ukraine to become a federation where regions would have broad powers.

Ilves said in Estonia, the term ethnic Russian is meaningless because Russians have lived in Estonia for 300 years, and they have different opinions about their connections to the country.

“There are Russians who want to apply for asylum in order to get away from Russia and then there are Russians who think Russia is the end-all-be-all,” he said. “Our Russians say we don’t want Russia’s view to be applied to us.”

The U.S. says it’s up to Ukrainians to determine the structure of their government, not Moscow.

Medvedev said Russia will create a special economic zone in Crimea — a peninsula of 2 million people — that will create incentives for business with lower taxes and simpler rules. Russia will also seek to develop the region as a top tourist destination and will try to ensure that plane tickets to Crimea are cheap enough to encourage more Russians to visit.

“We must create a new investment history for Crimea, which will be more successful than what it has been,” Medvedev said.

Medvedev particularly emphasized the need to ensure a stable power supply for the

The United States and the European Union have slapped travel bans and asset freezes on members of Putin’s inner circle for the annexation of Crimea and warned that Russia will face even more painful sanctions if it tries to invade eastern Ukraine.

But in a sign that Russian-U.S. talks could be inching toward a compromise, a senior Russian diplomat changed his tone Monday while speaking about Ukraine’s May 25 presidential election, which the West has urged Moscow to recognize.

Deputy Foreign Minister Grigory Karasin said in remarks carried by Russian news agencies that the Ukrainian vote should be fair and transparent. While Karasin said constitutional reform in Ukraine should remain the top priority, his statement seemed to indicate a softening of Russia’s previous stance that the presidential vote was premature and needed to be pushed back to the fall.

Karasin refused to say if Moscow would recognize the outcome of the vote.

– Laura Mills & Vladimir Isachenkov, Associated Press

– Madeleine Winer contributed to report