Kiev claimed it inflicted stinging defeats on pro-Kremlin rebels in east Ukraine on Thursday, as US President Barack Obama accused Russia of not abiding by a deal to defuse the escalating crisis in the ex-Soviet country.
Shooting was heard in the rebel-held flashpoint town of Slavyansk, where a roadblock manned by insurgents was in flames, according to an AFP journalist. Seven army armoured vehicles were approaching the town, one militant said.
Ukrainian special forces retook control of the town hall in the southeastern port city of Mariupol and an army base in the eastern town of Artemivsk repelled an attack by heavily-armed rebels, Kiev's interior and defence ministries said.
They were the first military successes announced by Ukraine's Western-backed government since pro-Russian militants seized control of a string of towns in the country's southeast over the past several weeks.
But they also greatly raise the stakes in the Cold War-style crisis after Moscow -- which Kiev and Washington accuse of controlling the insurgency and which has tens of thousands of troops massed on its border with Ukraine -- warned on Wednesday it could strike back if its interests in Ukraine were attacked.
Washington has begun deploying 600 US troops to boost NATO's defences in eastern European states bordering Ukraine, with the first unit of 150 soldiers arriving in Poland on Wednesday, with the remained due to land in the Baltics in the coming days.
Russian Foreign Minister Sergei Lavrov on Thursday accused the United States and the European Union of trying to stage "an operation to unconstitutionally change the regime," the Interfax news agency quoted Lavrov as saying.
"They are trying to use Ukraine as a pawn in a geopolitical game," he said.
Hours earlier, US President Barack Obama, on a trip to Japan, said Russia was not abiding by last week's agreement to defuse the Ukrainian crisis and issued his own warning that Washington was ready to slap fresh sanctions on Moscow.
The Kremlin, Obama said, was not abiding "by the spirit or the letter of the agreement in Geneva" struck a week ago between Russia, Ukraine and the West that was meant to de-escalate the tensions in Ukraine.
"We continue to see malicious, armed men taking over buildings, harassing folks who are disagreeing with them, destabilising the region and we haven't seen Russia step out and discouraging it," he said.
Kiev, on the other hand, has promised amnesty to the separatists, protection of the Russian language and decentralisation of power, Obama said.
The Geneva deal, struck between Ukraine, Russia, the US and the EU, called for militias in Ukraine to disarm and give up control of seized state property.
But while Washington and Kiev have put the onus on pro-Kremlin militants holding buildings in the east, Moscow said the responsibility fell to pro-Western nationalists camping out in Kiev.
Separatist sources in the east meanwhile confirmed they had lost the town hall in Mariupol, a port city on the Black Sea with a population of nearly 500,000. The city was the scene of a rebel attack on troops last week that left three militants dead. The separatists had held the town hall since April 13.
According to Interior Minister Arsen Avakov, "the town hall is liberated and can function normally".
In Artemivsk, just north of the rebel-held hub of Donetsk, Ukraine's defence ministry said in a statement that nearly 100 separatists "opened fire with automatic weapons, machine guns and used grenades" in the overnight attack on the military base.
It said a soldier was wounded, but not critically.
"The attackers were repelled and suffered significant losses," acting president Oleksandr Turchynov said in his own statement.
The Ukrainian government announced an offensive against the rebels following the discovery in a river near Slavyansk of a weighted down body of an abducted local politician who belonged to Turchynov's party.
On Thursday, a funeral was held for the dead man, Volodymyr Rybak, in his home town of Horlivka. His wife and friends wept before his body, which was covered in flowers, before prayers were said and it was taken for burial. Turchynov had said he had been "brutally tortured" and blamed the rebels, while his wife said he had been stabbed multiple times.
There were fears the spiralling violence on the ground in Ukraine could become a much bigger conflict.
Russia, which has an estimated 40,000 troops massed on Ukraine's eastern border, has said it could respond as in 2008, when it invaded Georgia with tanks to support pro-Russian regions seeking independence.
While Washington has begun deploying its troops to boost NATO dewfences, France said it is also sending four fighter jets to NATO air patrols over the Baltics starting on Sunday.
But Obama has ruled out direct military action in Ukraine, saying sanctions were the preferred tool to address the crisis.
The crisis in Ukraine has triggered the worst East-West confrontation since the collapse of the Soviet Union in 1991.
Russia's gas supplies to Ukraine -- and through it, to Europe -- have also become a significant source of tensions.
Putin has warned in a letter to the EU that Moscow could cut gas supplies in a month's time if Ukraine's bill -- now estimated at some $3.5 billion (2.5 billion euros) -- was not paid in full.
The energy concerns have caused global oil prices to spike. In Asian trade, Texas crude jumped 24 cents to $101.68 a barrel while Brent North Sea oil rose 19 cents to $109.30.