Ukraine launched what appeared to be its first major assault against pro-Russian forces who have seized government buildings in the country's east, with fighting breaking out in the early hours on Friday around a city that has become the focus of the insurgency.
Three deaths were reported in early fighting, but Ukraine's president claimed that an additional, unsubstantiated number of pro-Russian militiamen were subsequently killed and injured.
Russian President Vladimir Putin's spokesman said the offensive "effectively destroyed the last hope for the implementation of the Geneva agreements," deals intended to defuse the crisis.
Two Ukrainian helicopters were shot down and two of their crew members killed on Friday morning in Slovyansk, both sides said. A pro-Russia militiaman was reportedly killed in a separate incident there, according to the Associated Press.
The Ukrainian Security Service said one of the helicopters was shot down with a surface-to-air missile, which it said undercut Russia's claims that the city is in the control of civilians who took up arms.
Ukraine's acting President Oleksandr Turchynov said "many rebels" had died in his army's offensive.
"The criminals suffered heavy losses: many killed and many prisoners," he said.
"I appeal to the leadership of the Russian Federation: Stop the hysteria around the events taking place in Ukraine," he added.
Al Jazeera was not immediately able to verify Turchynov's claims.
He said previously on Friday that "armed saboteurs" had attempted to cross into Ukraine overnight but were pushed back by Ukrainian border troops.
Stella Khorosheva, a spokeswoman for the pro-Russian militants, said one of their men was killed and another injured. She offered no further details.
The center of Slovyansk appeared quiet but empty and tense, and fighting outside the city seemed to be over by Friday morning when an AP crew got into town.
Putin's spokesman, Dmitry Peskov, said the Kremlin had sent an envoy to Ukraine's southeast to negotiate the release of foreign military observers who were captured by pro-Russian militias in Slovyansk.
In comments to Russian news agencies, Peskov said the Kremlin has not been able to get in touch with the envoy, Vladimir Lukin, since Ukraine launched the offensive. However, Russia's Interfax and RIA Novosti news agencies quoted Lukin's aides as saying he was in touch and safe.
Russia’s Foreign Ministry also warned that Ukraine's use of the army against its own people in the east will lead to catastrophe and urged the West to renounce its "destructive policies."
The action came a day after Putin said that Ukraine should withdraw its military from the eastern and southern regions of the country. Russia has massed tens of thousands of troops along the Ukrainian border as it warns Ukraine's military not to move against the insurgents in the east.
Turchynov said this week that some troops were "either helping or cooperating with terrorist organizations."
The Ukrainian interior minister, Arsen Avakov, said in a statement that government troops met fierce resistance but had managed to take control of nine checkpoints on roads around Slovyansk.
Avakov called on the insurgents to lay down their arms and release the hostages they have taken.
"We are ready to negotiate with protesters and their representatives," Avakov said Friday. "But for terrorists and armed separatists there is only punishment."
The official spokesman for the military wing of the pro-Russian forces, who would give only his first name, Vladislav, said fighting had broken out at several points around the city. He said government armored vehicles were seen on roads leading into Slovyansk and claimed that Ukrainian troops had made incursions into the city itself.
Details of these claims could not be independently confirmed.
On the road leading into Slovyansk from Kramatorsk to the south, an AP reporter saw six Ukrainian armored vehicles parked on the side of the road Friday morning.
The armed element of the insurgency is focused on Slovyansk, a city 100 miles west of Russia in which seven European military observers from the Organization for Security and Cooperation in Europe remain held by pro-Russian gunmen.
Hours after Putin said Thursday that Ukraine should withdraw its military from the eastern and southern regions of the country, Turchynov ordered that the military draft be renewed, citing "threats of encroachment on the nation's territorial integrity" and interference by Russia in its internal affairs.
Moscow has repeatedly denounced Ukrainian security forces' largely ineffectual operation against the eastern insurgents, and has warned the government not to commit violence against civilians.
In a telephone conversation with German Chancellor Angela Merkel, Putin said the removal of military units was the "main thing," but it was unclear if that could be construed as an outright demand.
Earlier in the week, the acting president said police and security forces had been effectively "helpless" against insurgents in the Donetsk and Luhansk regions, the heart of the unrest, and that efforts should be focused on preventing the instability from spreading to other parts of the country.
So far, U.S. and European Union sanctions on Moscow over Ukraine have not affected natural gas or oil flows from Russia, a regional energy giant. Still, the unrest is stoking fears that political instability will affect the global energy supply.
In a joint briefing with Merkel on Friday at the White House, President Barack Obama stopped short of saying sanctions would target Russia's energy sector.
Obama said the militia members killed by Ukrainian military forces were "heavily armed militants who are receiving significant support from Russia. Russia needs to use its influence over these paramilitary groups so they disarm."
If the militia does not withdraw before Ukraine's elections, slated for May 25, the U.S. and EU will "impose costs on Russia for its actions," he added.
Merkel echoed Obama's threat on deepened sanctions.
"This is not something that we want. We have made an offer for a diplomatic solution. It's very much up to the Russians," she said.
Russia's energy minister has said natural gas exporter Gazprom would reduce supplies to Ukraine in June if no prepayment is received this month.
In a move aimed at offering Ukraine economic independence from Moscow, EU Energy Commissioner Guenther Oettinger said Friday that the EU wants a uniform price for Russian gas for all its member states, adding that Europe's common gas infrastructure should include Ukraine, Georgia and the western Balkans.
Currently, EU member states buy Russian gas on the basis of bilateral contracts with Moscow, and pay different prices. Common purchases would improve the EU's negotiating power and cut the price.
Ukraine fully supports the idea of introducing a unified price for natural gas in the EU, its energy minister, Yuri Prodan, told reporters in Warsaw ahead of a meeting with his Russian counterpart and Oettinger.
Ukrainian energy independence would make it more difficult for Russia to exert pressure on Ukraine as well as the rest of Europe. In the winters of 2006 and 2009, when Ukraine and Russia clashed over oil prices, Moscow halted deliveries not only to Ukraine but to the rest of Europe.
Al Jazeera and wire services
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