Talks between Russian and Ukrainian officials continued late into Friday with both sides failing to agree on the resumed gas supply to Europe via Ukraine.
According to Russian requests, independent European Union representatives started work in Ukraine's capital, Kiev, to monitor the flow of gas. This was a condition critical for closing the agreement.
Russia however said it would only restart pumping gas to Europe via Ukraine after a written deal is signed.
Russia has accused Ukraine of gas theft and wants monitors in place to prevent theft.
Ukraine has strongly denied the accusation, telling reporters angrily, Ukraine is not stealing gas.
Gazprom, largest extractor of natural gas in the world, halted all natural gas shipments through Ukraine on Wednesday, ending or reducing gas supplies to more than a dozen European nations amid a pricing dispute with Kiev.
In the past Russia has sold gas to Ukraine and some other ex-Soviet neighbors at prices significantly less than European prices.
Russian President Dmitry Medvedev, said Friday that Ukraine should pay a European price for the Russian gas. Last year, Russia charged Ukraine $179.50 per 1,000 cubic meters, about half what it charged its European customers.
Russia's last offer before talks broke down was $250, but Gazprom said the offer no longer stands after Ukraine rejected it and that it will charge Ukraine $450.
Both Russia and Ukraine have been criticized by EU governments as this dispute has left many homes, businesses and schools unheated.
The suspended gas supplies have left many European nations suffering having to face the icy winter conditions.
Ten people have reportedly frozen to death in Poland.