President Petro Poroshenko said about "200 insurgents used tanks to storm" Novolaspa -- a village halfway between the separatists' de facto capital Donetsk and the Kiev-held port of Mariupol -- in a pre-dawn raid that caught government soldiers off guard.
Chief of Staff General Viktor Muzhenko "informed the president that the Ukrainian forces gave a fitting rebuff and repelled all the attacks," the presidency said.
But the defence ministry later reported the insurgents mounting a second attack on the same village whose outcome was not immediately clear.
The Ukrainian foreign ministry called the clashes "a dangerous indication of a further escalation to come".
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But the rebels denied the push and signalled that they had always had militia units stationed in Novolaspa.
"The armed forces of Ukraine simply put the village under a heavy shelling attack," a local separatist official told the rebels' main news site.
"Novolaspa remains under the control of the People's Republic of Donetsk."
Kiev today reported the death of one soldier while the insurgents accused government forces of killing a civilian in the rebel-held bastion of Gorlivka.
The clashes have killed more than 6,800 people and sent Moscow's relations with the West crashing to their lowest point since the Cold War.
The fighting has also left 1.4 million homeless and sent Ukraine's economy -- heavily dependent on exports from the industrial east of the country -- into a tailspin.
The West is still pinning hope on a February truce agreement that has often been ignored but also kept the fighting limited to a flashpoints in the Russian-speaking east of the former Soviet state.