At least two people were killed and nine wounded yesterday in gun battles between Ukrainian special forces and pro-Kremlin militias that threatened to scuttle the first international talks on the worst East-West crisis since the Cold War.
The clashes across the ex-Soviet state's separatist eastern rust belt broke out a day after masked gunmen stormed a series of police and security service buildings in coordinated raids that Kiev blamed on the "provocative activities of Russian special services".
The heavily Russified region has been riven by unrest since a team of Western-backed leaders rose to power in February on the back of bloody protests against the old regime's decision to reject an EU alliance and look for future assistance from the Kremlin.
Russia has since massed around 40,000 soldiers along Ukraine's eastern frontier and threatened to halt its neighbour's gas supplies over unpaid bills -- a cutoff that would impact at least 18 EU nations and threaten further retaliation against the Kremlin.
Saturday's attacks were especially unsettling for both Kiev and Western leaders because of their remarkable similarity to events leading up to Russia's annexation of Ukraine's Crimea peninsula last month.
The balaclava-clad gunmen were armed with special-issue assault rifles and scopes most often used by nations' crack security troops.
Many wore unmarked camouflage uniforms similar to those seen on the highly trained units that seized the Black Sea peninsula in early March. They also moved with military precision and cohesion.
But Russia denied any involvement. And it sternly warned Kiev late on Saturday that the use of force against pro-Russian protesters could ruin the chances of the two sides sitting down for US-EU mediated talks in Geneva on Thursday.
Ukraine's Interior Minister Arsen Avakov announced the launch of an "anti-terrorist" operation in the eastern Donetsk region early yesterday.
He said crack units from Ukraine's SBU security service moved first into the city of Slavyansk to regain control of a police station that had been seized by about 20 militants on Saturday.
But Avakov admitted that his troops had to "regroup" after meeting stiff resistance and suffering casualties.
The local administration separately reported a series of heavy clashes on a highway linking Slavyansk with the region's capital Donetsk to the south.
Saturday's raids drew expressions of grave concern from world leaders and Russian warnings against any use of force against the militants.
The US State Department said John Kerry phoned his Russian counterpart Sergei Lavrov on Saturday to make "clear that if Russia did not take steps to deescalate in eastern Ukraine and move its troops back from Ukraine's border, there would be additional consequences".
Britain's Foreign Office said the wave of occupations of government buildings was "a dangerous escalation".