Russian President Vladimir Putin told German Chancellor Angela Merkel the withdrawal of Ukrainian military units from the south-east of the country, ending violence and launching a national dialogue are key issues.

Russian President Vladimir Putin told German Chancellor Angela Merkel the withdrawal of Ukrainian military units from the south-east of the country, ending violence and launching a national dialogue are key issues, the Kremlin said.

The Kremlin also said that Merkel, in a call on Thursday it said she initiated, asked Putin to help free European military observers who are being held by pro-Russian groups in Ukraine.

A spokeswoman for the German government said Merkel and Putin focused on the detention of the observers from the Organization for Security and Cooperation in Europe (OSCE), a democracy watchdog.

"The German chancellor reminded President Putin of Russia's responsibility as an OSCE member state and called on the president to exert his influence," Christiane Wirtz said.

"They also spoke about the significance of elections in Ukraine on May 25, which are crucial for the stability of the country," he added.