Washington  - Russia's decision to cut off gas supplies to Europe because of a contract dispute with Ukraine is "unacceptable," the US State Department said Wednesday.

Russian Prime Minister Vladimir Putin green-lighted a full stop of natural gas shipments to Europe through Ukraine, causing shortages on the continent at a time when heating demands increase to counter the chilly winter season.

"Cutting off these supplies during winter to vulnerable populations is just something that is unacceptable to us," State Department deputy spokesman Robert Wood said.

Wood urged Russia and Ukraine to reach a "transparent" agreement to end the week-long crisis. The dispute centres around a failure to come to terms with a delivery contract for 2009.

Russia's natural gas monopoly Gazprom also accused Ukraine of siphoning off shipments meant for Europe, charges Kiev denies. The European Union has strongly condemned Putin's decision. (dpa)