MOSCOW (Reuters) - Russia's FSB security service said on Monday it had caught an employee of the Organization for Security and Co-operation in Europe spying for Ukraine by passing on sensitive military information about pro-Kremlin separatists.

The OSCE is monitoring a fragile ceasefire in eastern Ukraine where pro-Russian separatists and Ukrainian government forces still regularly exchange fire.

Its opinion counts, not least because German Chancellor Angela Merkel has said she wants Russia to do more to resolve the crisis before the European Union considers whether to lift sanctions imposed on Moscow over its actions in Ukraine.

The FSB said in a statement it had clear evidence that Ukraine's SBU intelligence service was illegally using the OSCE to gather military information.

It said an OSCE translator, Artyom Shestakov, a Ukrainian national, had been recruited by the SBU and had passed on information about the movements of military convoys, troop numbers, and the mobile phone numbers of military commanders.

In late 2015, it said he had obtained information about a local pro-Russian Cossack leader who was later killed by the Ukrainian intelligence services.

Shestakov had been detained on Russian soil, the FSB said, and had confessed to spying. He was allowed to return to Ukraine because the FSB said his actions had not harmed Russia's own national security, but was banned from entering Russia, it said.

The SBU declined to comment.

The OSCE's Special Monitoring Mission to Ukraine issued a statement via social media, saying it was able to confirm that one of its local employees in eastern Ukraine was temporarily out of reach while on leave.

It said it knew where he was and that he was safe. It was for now unable to provide further details, it said.

(Reporting by Dmitry Solovyov in MOSCOW and Natalya Zinets in KIEV; Editing by Andrew Osborn)