European stocks fell on Thursday with investor focus on diplomatic Russia-Ukraine talks and the European Central Bank policy's decision, which is likely to highlight the impact of the eastern Europe crisis on the euro zone economy.

The pan-European STOXX 600 index fell 0.8%, after a 4.7% surge on Wednesday as Russia and Ukraine expressed willingness to talk.

Foreign ministers of both the countries met in Turkey on Thursday in the first high-level talks since Moscow invaded its neighbor, with Ankara hoping they could mark a turning point in the conflict.

A wave of sanctions against Russia, including a U.S. ban on its oil imports sent crude prices to 2008 highs this week and equity markets tumbling as investors fretted over soaring inflation.

The ECB will release its policy decision at 1245 GMT, with economists expecting few policy commitments as the crisis in Ukraine up-ends its expectations for the economy, with inflation in the euro zone already at a record high.

"They are walking a policy tightrope," said Neil Birrell, chief investment officer at Premier Miton Investors.

"Inflation will be rampant, driven by energy and food prices soaring, turbocharged by the conflict in Ukraine. It can't be left to run out of control, but, equally, the ECB will be worried about acting in a way that makes growth roll over."

Meanwhile, EU leaders will hold talks at a summit in Versailles about a joint investment plan to boost the bloc's independence in defense and energy.

European stocks hit record highs at the start of the year, with banks soaring as investors bet on a strong economy and tighter monetary policies globally. However, the Ukraine crisis upended the rally, driving the benchmark STOXX 600 down almost 12% so far this year.

Automakers, banks and retailers fell the most, while defensive sectors such as real estate and healthcare inched higher.

Among stocks, Carlsberg slipped 3.5% after Danish brewer suspended its forecast due to uncertainty about the large Russian market.

German fashion house Hugo Boss fell 4.6% after announcing a temporary halt to its business in Russia, but forecast an upbeat 2022.

Vivendi inched up 1.8% after the French media group reported a doubling in core operating earnings in 2021.