* Merkel says Nord Stream 2 no threat to diversification
* Says wants Ukraine to still have gas transit traffic
* Poland fears increased dependence on Russian gas
* Polish PM: Nord Stream 2 menaces Ukraine's existence (Adds quotes from Polish PM)
By Joseph Nasr and Noah Barkin
BERLIN, Feb 16 (Reuters) - The planned Nord Stream 2 gas pipeline connecting Germany and Russia poses no threat to Europe's energy security, Chancellor Angela Merkel said on Friday, publicly disagreeing with her Polish counterpart.
Poland, Ukraine and Baltic states fear the pipeline to be laid under the Baltic Sea would increase Europe's dependence on Russian gas and could cut off Ukraine - still fighting a conflict with Russian-backed separatists - from gas transit fees.
"We had different views on the Nord Stream issue," Merkel told reporters at a joint press conference with Polish Prime Minister Mateusz Morawiecki in Berlin.
"We think this is an economic project. We are also for energy diversification. We also want Ukraine to continue to have transit gas traffic, but we believe Nord Stream poses no danger to diversification," she said.
Morawiecki stressed the shared interests of Poland and its main trade partner Germany, but disagreed with Merkel that Nord Stream 2 would diversify gas supplies.
"This is gas from the same source, but via a different route. We indicate the risks related to cutting Ukraine from transit," he said, adding however that Merkel's comments on assuring Ukraine's gas traffic fees were important.
Morawiecki has called for the United States to impose sanctions on the planned pipeline, which U.S. Secretary of State Rex Tillerson said last month the U.S government sees as a threat to Europe's energy security.
"Once Nord Stream 2 is going to be built (Russian President Vladimir) Putin can do with Ukraine whatever he wants," Morawiecki told reporters later on Friday. "And then we have potentially his army on the eastern border of the EU."
More than 10,000 people have been killed since 2014 in the conflict in eastern Ukraine. Poland, a member of the European Union and NATO, shares a 535-km (330-mile) land border with Ukraine.
While the Kremlin has denied providing military support for separatists in eastern Ukraine, the United States has sanctioned Russian firms over Moscow's role in the Ukraine conflict and foreign companies helping Russian energy exploration.
Separately, Nordic nations have voiced security concerns over the pipeline being laid near their shores under the Baltic.
Germany and Austria have focused more on the commercial benefits of having more cheap gas, arguing there could be little harm from an additional pipeline.
German energy groups Uniper and Wintershall, Austria's OMV, Anglo-Dutch group Shell and France's Engie have invested in the 1,225 km (760-mile) pipeline. (Writing by Paul Carrel and Marcin Goettig; Additional reporting by Paul Carrel in BERLIN, Marcin Goettig in WARSAW; Editing by Mark Heinrich)