(Adds U.S. funding for Moldova, edits)
* Lavrov, Kerry meet in Paris on Ukraine standoff
* U.S. orders top general back to Europe
* Sanctions can't be dismissed but not so painful -Lavrov
* Putin called Obama Friday to discuss solution -White House
By Alexei Anishchuk and Lesley Wroughton
MOSCOW/PARIS, March 30 (Reuters) - America's top general in Europe has been sent back early from a trip to Washington in what the Pentagon on Sunday called a prudent step given Russia's "lack of transparency" about troop movements across the border with Ukraine.
General Philip Breedlove, who is both NATO's Supreme Allied Commander Europe and the head of the U.S. military's European Command, arrived in Europe Saturday evening. He had been due to testify before Congress this week.
U.S. Defense Secretary Chuck Hagel considered Breedlove's early return "the prudent thing to do, given the lack of transparency and intent from Russian leadership about their military movements across the border," a Pentagon spokesman said. Washington says there are 40,000 Russian troops on Ukraine's borders.
The pentagon announcement came as U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov met in Paris seeking to hammer out the framework of a deal to reduce tensions over Russia's annexation of Ukraine's Crimea region.
They aim to develop a proposal conceived by Kerry and Lavrov at earlier sessions, with Western leaders considering broader sanctions against Russia that would target vital sectors of its economy including its mainstay oil and gas industry.
Ideas on the table included a deployment of international monitors in Ukraine, the withdrawal of Russian forces from Crimea and the border zone around Ukraine, and the launch of direct talks between Moscow and the government in Kiev.
"Today, we expect Secretary Kerry and Foreign Minister Lavrov to continue the discussion they've been having in the interest of finding concrete ways to de-escalate the conflict," a senior U.S. State Department official said.
Kerry and Lavrov hoped to build on a phone call on Friday between presidents Vladimir Putin and Barack Obama, according to senior U.S. officials, to defuse the worst East-West confrontation since the Cold War ended two decades ago.
A spokeswoman for European Union foreign policy chief Catherine Ashton said the EU strongly favoured "meaningful dialogue" between Ukraine and its old Soviet-era master Russia.
"Russian officials have been stating that Moscow has no intentions beyond Crimea. We expect to see words translated into deeds, including with regard to the military build-up at the regions bordering Ukraine," Ashton's spokeswoman said.
As the West's concerns in the region rise, the United States announced it was pledging $10 million to bolster border security in Moldova at a time when concerns are rising about divisions within the country over a trade deal with Europe and Russia's intervention in neighbouring Ukraine.
The United States and EU have meted out two rounds of sanctions on Russia, including visa bans and asset freezes for some of Putin's inner circle, to punish Moscow over its seizure of Crimea, a Russian-majority Black Sea peninsula, after mass protests ousted Kiev's pro-Russian president in February.
"I don't want to say that sanctions are ridiculous and that we couldn't care less, these are not pleasant things," Lavrov told Russia's Channel One.
"We find little joy in that, but there are no painful sensations. We have lived through tougher times."
RUSSIA RAPS WESTERN CURBS ON CONTACT
Lavrov said Western powers had put unofficial restrictions in place, urging their diplomats in Moscow to boycott meetings attended by Russian officials and lawmakers on the sanctions list.
He said Russian diplomats in EU capitals had also been refused meetings with officials from EU foreign ministries.
Crimeans voted to secede from Ukraine and join Russia in a March 16 referendum dismissed as a sham by Western governments that say it violated Ukraine's constitution and was held only after Russian forces seized control of the region.
The West has threatened tougher sanctions against Russia's stuttering economy if Moscow invades eastern Ukraine.
The West has refused to recognise Crimea's absorption into Russia although U.S. officials acknowledge that the takeover of is not likely to be resolved soon. Instead, talks have homed in on warnings to Moscow not to go further into Ukraine.
U.S. officials are deeply worried about the massing of what they estimate are up to 40,000 Russian troops on Ukraine's border, which is stoking concerns in Washington and elsewhere that Russia is preparing a wider incursion into Ukraine.
While Moscow has said the buildup is part of normal Russian exercises only, Obama has described it as out of the ordinary that could be a precursor to other actions.
Germany is considering offering military support to some eastern European members of the NATO defence alliance in response to Russia's seizure of Crimea, news magazine Der Spiegel reported at the weekend.
The meeting in Paris comes days before a gathering of NATO foreign ministers in Brussels on Tuesday and Wednesday that is likely to focus on Ukraine and Russia's actions.
Lavrov, speaking on Russian television on Saturday, said Moscow had "no intention" of invading eastern Ukraine and reinforced a message from Putin that Moscow would settle - at least for now - for control over Crimea.
Lavrov, added, however that Russia was ready to protect the rights of Russian speakers, referring to what Moscow sees as threats to the lives of compatriots in eastern Ukraine.
(Additional reporting by Phil Stewart; Editing by Mark Heinrich and Giles Elgood)