German Chancellor Angela Merkel underscored the urgency of holding direct talks between Russia and Ukraine in a phone talk with Russian President Vladimir Putin on Sunday, a German government spokesman said.

The two leaders have talked about the tense security situation in Ukraine without prejudice to their different views on the referendum in Ukraine's Crimea and the issue of territorial integrity and sovereignty of Ukraine, spokesman Steffen Seibert said in a statement.

Merkel said the existing presence of the Organization for Security and Cooperation in Europe (OSCE) in Ukraine should be quickly expanded and a larger number of observers be sent to conflict areas, in particular in eastern Ukraine.

The chancellor also stressed that it is urgent and necessary for the governments of Russia and Ukraine to hold direct talks to solve problems.

Crimea is holding a referendum Sunday on its future status. The vote was described by some western countries as illegal.

According to the Kremlin website, Putin told Merkel during the phone talk that the ongoing Crimea referendum does not breach international law.

"Putin said the Crimean population's vote is proceeding in full compliance with international law, in particular with Article 1 of the U.N. Charter that stipulates the principle of equality and self-determination of peoples," the Kremlin website said.

"Russia will respect the choice of Crimean residents," Putin said, adding that he was concerned about the aggravation of the situation in eastern and southeastern regions of Ukraine, according to the Kremlin webiste. Endi

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