* Poroshenko sworn in a day after meeting Putin
* Takes uncompromising line on Crimea, EU relations
* Seeks peace in east, offers corridor for fighters to leave
* Shelling continues in east (Adds reaction from east, colour, background)
By Richard Balmforth
KIEV, June 7 (Reuters) - Ukraine's new president Petro Poroshenko said his country would never give up Crimea and would not compromise on its course towards closer ties with Europe, spelling out a combative and defiant message to Russia in his inaugural speech on Saturday.
The 48-year-old billionaire took the oath of office before parliament, buoyed by Western support but facing an immediate crisis in relations with Russia as a separatist uprising seethes in the east of his country.
Russia annexed the Crimean peninsula in March, weeks after street protests ousted Poroshenko's pro-Moscow predecessor, Viktor Yanukovich, in a move that has provoked the deepest crisis in relations with the West since the Cold War.
"Citizens of Ukraine will never enjoy the beauty of peace unless we settle our relations with Russia. Russia occupied Crimea, which was, is, and will be Ukrainian soil," Poroshenko said in a speech that drew a standing ovation.
He had told this to Russia's Vladimir Putin when the two met on Friday at a World War Two anniversary ceremony in France, he said.
Poroshenko, who earned his fortune as a confectionery entrepreneur and is known locally as the "Chocolate King", said he intended very soon to sign the economic part of an association agreement with the European Union, as a first step towards full membership.
This idea is anathema to Moscow, which wants to keep Ukraine in its own post-Soviet sphere of influence.
His voice swelling with emotion, Poroshenko stressed the need for a united Ukraine and the importance of ending the conflict that threatens to further split the country of 45 million people. He said it would not become a looser federalised state, as advocated by Russia.
"There can be no trade-off about Crimea and about the European choice and about the governmental system. All other things can be negotiated and discussed at the negotiation table. Any attempts at internal or external enslavement of Ukraine will meet with resolute resistance," Poroshenko said.
Poroshenko, Ukraine's fifth president since independence, won a landslide election on May 25 after promising to bridge the east-west divide that has split the country and thrust it into a battle for its survival.
Ukrainians hope the election of Poroshenko, who is married with four children, will bring an end to the most tumultuous period in their post-Soviet history.
More than 100 people were shot dead by police in Kiev by police in the street protests that eventually brought Yanukovich down and in the east, scores of people, including separatist fighters and government forces have been killed in fighting since April.
The uprising in the east is not the only challenge facing Poroshenko, who inherits a country on the verge of bankruptcy, still dependent on Russia for natural gas and rated by watchdogs as one of the most corrupt and ill-governed states in Europe.
The forceful speech by Poroshenko, who served as foreign minister and minister for economic development in previous administrations, drew an ovation from guests and VIPs who included Lithuanian President Dalia Grybauskaite, U.S. Vice-President Joe Biden and senior EU officials.
Cheering crowds later greeted him on a walk in blazing sunshine on the square in front of Kiev's St Sophia's Cathedral, which was decked out with the blue and yellow national flags.
EASTERN WAR ZONE
Since Poroshenko's election, government forces have stepped up their operations against the separatist rebels in eastern Ukraine who want to split with Kiev and become part of Russia.
The rebels have fought back, turning parts of the Russian-speaking east into a war zone. On Friday they shot down a Ukrainian army plane and killed a member of the interior ministry's special forces in the separatist stronghold of Slaviansk.
Poroshenko vowed to have no truck with "bandits" but urged pro-Moscow separatists to lay down their arms, offering a guarantee to provide a safe corridor for Russian fighters to go home.
"Please, lay down the guns and I guarantee immunity to all those who don't have bloodshed on their hands."
He spelled out, too, a conciliatory message to the people of the east. Switching to Russian from Ukrainian to address them, he said they had been duped by myths about Kiev leaders, stoked by Russian propaganda and the Yanukovich "clan". He separately accused Yanukovich of "financing terrorists".
He promised to visit the east with guarantees of Russian-language rights and proposals for de-centralisation that would give their regions a bigger say in running their own affairs.
But a jarring message from the eastern rebels, who have declared their own "people's republics", spelled out the scale of the separatist challenge facing him.
"What they (Kiev's leaders) really want is one-sided disarmament and for us to surrender. That will never happen in the Donetsk People's Republic," a top separatist official, Fyodor Berezin, said by telephone from Donetsk, an industrial hub where rebels have occupied strategic points.
"As long as Ukrainian troops are on our soil, I can see that all Poroshenko wants is subjugation. The fight will continue," he said.
Government forces shelled rebel positions in Slaviansk on Saturday and manned checkpoints on roads into the city.
Inna, 38, who was leaving the city by foot with her mother and grandmother, said: "All you hear is shelling and bombing. Yesterday entire houses burnt down."
"We've been hiding in the cellar for three days and we finally decided to leave. There is no water or electricity" she said as she made her way out, carrying bags of food and clothes and flasks of water.
In the days leading up to his inauguration, Poroshenko met both U.S. President Barack Obama, who warmly endorsed his leadership, as well as Russia's Putin.
At a brief meeting in France, where they were attending World War Two commemorations, French officials said Poroshenko and Putin shook hands and agreed that detailed talks on a ceasefire between Kiev government forces and the pro-Russian separatists would begin within a few days.
Russia denounced the overthrow of pro-Moscow President Viktor Yanukovich and has accused the Ukrainian authorities of worsening the crisis in the east by resorting to military force instead of dialogue.
It denies accusations by Kiev and Western governments that it is supporting the rebels and allowing fighters from Russia to cross into Ukraine to fight with the rebels.
Putin told reporters he welcomed proposals set out by Poroshenko for ending the conflict. However he declined to say what they were and said Ukraine must halt what he called "punitive" military operations against pro-Russian separatists.
The two countries are also at odds over the pricing of Russian natural gas, with Moscow threatening to cut supplies as early as next week unless Ukraine settles its debt, the amount of which is disputed. (Additional reporting by Thomas Grove in Slaviansk and Alissa de Carbonnel in Luhansk; Writing by Mark Trevelyan and Richard Balmforth; Editing by David Holmes and Raissa Kasolowsky)
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