At least four Ukrainian servicemen were killed and 30 injured battling heavily armed insurgents around the flashpoint eastern town of Slavyansk as Russia warned the violence was putting peace in Europe in peril.
The interior ministry in Kiev said the pro-Russian gunmen controlling the town were using civilians as human shields and shooting from houses, some of which were ablaze.
"They are waging a war on us, on our own territory... my mission is to eliminate the terrorists," Interior Minister Arsen Avakov told reporters near Slavyansk, from where he was overseeing the assault.
Authorities in the regional capital Donetsk said one civilian in Slavyansk was killed and some 15 wounded in the fighting.
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The advance on Slavyansk was part of a wider military operation in the east to root out the separatist insurgents, who are holding more than a dozen towns.
The authorities retook control of the TV tower near Slavyansk but lost a helicopter, cut down by machine gun fire. The pilots survived.
The report accused Ukrainian "ultra-nationalists" -- who Moscow claims control Kiev's government -- of rights violations on a "mass" scale.
Moscow later warned of an evolving "humanitarian disaster" in eastern Ukraine where it said Kiev was carrying out "terror against its own people."
But Ukraine's interim president declared it was Russian meddling that had brought war to his country. He warned pro-Russian provocateurs might stage violence in Kiev during celebrations on Friday marking the Soviet victory over Nazi Germany in World War II.