By Gabriela Baczynska
BRUSSELS (Reuters) - The European Union on Friday took the first step to impose new sanctions on Belarus over a disputed election last Sunday and a crackdown on protests that followed, instructing its foreign policy arm to prepare a blacklist of responsible individuals.
President Alexander Lukashenko claimed victory but now faces the biggest challenge to his 26-year rule, with tens of thousands protesting for a sixth day running on Friday and opposition leader Sviatlana Tsikhanouskaya calling for a recount of the votes.
"EU will now initiate a process of sanctions against those responsible for the violence, arrests and fraud in connection with the election," Sweden's Foreign Minister Ann Linde said after emergency talks among all her EU peers on Friday.
The EU first imposed sanctions on Belarus in 2004. It tightened them in 2011 over abuses of human rights and democratic standards, including vote rigging.
Many were lifted after Lukashenko released political prisoners in 2016. But an arms embargo remains, as do sanctions on four people over the unresolved disappearances of two opposition activists, a journalist and a businessman, years ago.
Lukashenko denies electoral fraud. His government freed many detained demonstrators on Friday after issuing a rare public apology. However, citizens took to the streets again on Friday after at least two protesters were killed and thousands detained in a violent crackdown this week.
"What happened in Belarus in the last few days is completely unacceptable and calls for a clear reaction of the EU," Germany's Haiko Maas told reporters.
Maas called on the Belarus government to release political prisoners and review the official election result, which gave Lukashenko 80%, triggering protests in which security forces beat demonstrators and arrested several thousand people.
The top EU diplomat, Josep Borrell, said the bloc did not accept the official election results.
Poland, the Czech Republic, the three Baltic states and Denmark also pushed for mediated talks between Lukashenko and the opposition.
Vilnius called for an EU fund to support victims of repression in Belarus while Warsaw said it would loosen visa restrictions, open its labour market for Belarusians and support civil society and independent media there.
"We ... need to find a careful balance between pressure against and engagement with Belarus President Lukashenko. We believe the EU should assume the role of a mediator as soon as possible," the six countries said in a joint letter seen by Reuters on Friday.
Their line reflects wariness of any repeat of the 2013/14 street protests in Kyiv, which the EU and the United States supported and Russia then used as an excuse to annex Crimea from Ukraine before backing separatists in the east of the country.
The new sanctions on Belarus would come in the form of visa bans and the freezing of any assets held in the EU by the designated individuals and could be finalised as soon as the end of the month, diplomatic sources said.
Charles Grant, director at the Centre for European Reform think-tank, said the EU should also coordinate its response with the United States and Britain.
"Ultimately, change in Belarus will depend on the Belarusian people, but Europe and the U.S. can do their bit to help," he said.
(Reporting and writing by Gabriela Baczynska, Additional reporting by Sabine Siebold, Johannes Hellstrom, Kirsti Knolle, Editing by Kevin Liffey, Frances Kerry and David Goodman)