* Third leg of East-West talks kicks off in Vienna
* Russia says this week's diplomacy has so far been unsuccessful
* Polish foreign minister says Europe closest to war for 30 years (Combines OSCE talks, Kremlin reaction)
By Thomas Escritt and Dmitry Antonov
VIENNA/MOSCOW, Jan 13 (Reuters) - Russia said on Thursday that talks with the West had so far failed to bridge fundamental differences over the Ukraine crisis and Moscow's demands that NATO pull back from central and eastern Europe.
The Kremlin gave a stark assessment of this week's diplomacy as talks moved to Vienna, where Poland's foreign minister said Europe was closer to war than any time in the last 30 years and the U.S. envoy said the West should not give in to blackmail.
Russia has forced the United States and its allies to the negotiating table by assembling around 100,000 troops near the border with Ukraine, while denying it plans to invade.
It says that after decades of NATO expansion it is determined to draw "red lines" and stop the alliance from admitting Ukraine as a member or basing missiles there.
The United States says Russian demands to veto Ukrainian membership and halt NATO military activity in eastern Europe are non-starters, but it is willing to talk to Moscow about arms control, missile deployments and confidence-building measures.
Kremlin spokesman Dmitry Peskov told reporters that talks so far this week with the United States and NATO had yielded some "positive nuances" but this was not enough.
"The negotiations were initiated (for us) to receive concrete answers to concrete, fundamental questions. Disagreement has been registered precisely on these fundamental questions," he said.
He criticised a sanctions bill unveiled by U.S. Senate Democrats on Wednesday that would target top Russian government and military officials, including President Vladimir Putin, as well as key banking institutions, if Russia attacks Ukraine.
Peskov said sanctioning Putin would be tantamount to severing relations.
"We view the appearance of such documents and statements extremely negatively against the background of an ongoing series of negotiations, albeit unsuccessful ones," he said.
RISK OF WAR
Talks moved on Thursday to the 57-nation Organization for Security and Cooperation in Europe (OSCE), where Polish Foreign Minister Zbigniew Rau called for a peaceful resolution over Ukraine.
"It seems that the risk of war in the OSCE area is now greater than ever before in the last 30 years," Rau said in a speech, without naming Russia.
U.S. ambassador Michael Carpenter told the OSCE meeting: "As we prepare for an open dialogue on how to strengthen security for the benefit of all, we must decisively reject blackmail and never allow aggression and threats to be rewarded."
Russia has said it will decide on its next moves after this week's talks. It has threatened unspecified "military -technical measures" if its demands are rejected.
U.S. Deputy Secretary of State Wendy Sherman said on Wednesday that if Russia wall ked away, it would show it was never serious about diplomacy in the first place.
The United States has largely settled on the options for sanctions against Russia should it invade Ukraine and will be prepared to impose them as soon as any tanks roll, senior Biden administration officials said on Wednesday.
(Additional reporting by Francois Murphy and Tom Balmforth; writing by Mark Trevelyan; editing by Philippa Fletcher)
Our Standards: The Thomson Reuters Trust Principles.
