The Western-backed leader said Ukraine's efforts to stamp out the 15-month eastern revolt had drained security resources and left peaceful cities open to attacks from criminals and those allied to rebel fighters.
"The terrorist threat level has significantly risen outside the zone where we are conducting our anti-terrorist operation," the 49-year-old former chocolate magnate said in a televised address.
Ukraine refers to the insurgents as "terrorists" -- a label that infuriates Russia.
Moscow denies backing the fighters and defends the uprising as an expression of free will in a mostly Russian-speaking region that looks sceptically at the pro-European stance adopted by the former Soviet nation in the past year.
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"The enemy is once again resorting to the use of heavy weapons, sabotage and reconnaissance groups," Ukrainian military spokesman Andriy Lysenko told reporters.
Ukrainian officials reported the death of two soldiers in separate incidents.
One of the servicemen died in a brief battle that broke out 15 kilometres northeast of Lugansk -- capital of the smaller of the two separatist regions.
"One serviceman was killed in fighting and another was injured and hospitalised," Kiev-appointed Lugansk region leader Gennadiy Moskal.
Lysenko said another soldier was killed and nine wounded in various exchanges of fire whose details he failed to disclose.
A February truce deal managed to contain some of the clashes but daily exchanges of fire continue to add to the death toll.