UPDATE 1-Russia: Diplomatic ties with US could break down over asset seizures

(Adds Ryabkov in paragraphs 4-5, Peskov 7-8)

MOSCOW, Dec 22 (Reuters) -

Russia may cut diplomatic ties with the United States if Washington confiscates Russian assets frozen over the Ukrainian war, the Interfax news agency quoted Deputy Foreign Minister Sergei Ryabkov as saying on Friday.

The United States "must not act under an illusion... that Russia is clinging with both hands to diplomatic relations with that country," Ryabkov said.

Russia has described relations with the United States as "below zero" because of U.S. military and financial aid for Ukraine in the war now approaching the end of its second year.

Ryabkov said Russia, which sent forces into Ukraine in February 2022 in what it called a "special military operation", would not be the one to initiate a break in diplomatic ties, but such a rupture could be prompted by a variety of factors.

"The trigger could be asset confiscation, further military escalation, many other things. I would not go into negative forecasts here," he said, adding that Moscow was "ready for any scenario".

Some Western politicians are urging that frozen Russian assets worth some $300 billion be

handed to Ukraine

to help rebuild its war-shattered economy.

Kremlin spokesman Dmitry Peskov told reporters on Friday that any such move would deal a serious blow to the global financial system.

He said Russia would "never leave in peace" any country that seized its assets, and in such a scenario it would look at what Western assets it could confiscate in retaliation.

Russia has hit back in a variety of ways against Western sanctions aimed at punishing it for the Ukraine war and hindering its ability to finance it.

This week, President Vladimir Putin ordered that two European concerns, Wintershall Dea and OMV, be

stripped

of multi-billion-dollar stakes in gas projects in the Russian Arctic. (Reporting by Reuters, writing by Mark Trevelyan, editing by Mark Heinrich)