The offensive sent international tensions soaring and oil prices up, raising the prospect of Russia making good on its threat of a massive response in the ex-Soviet republic.
In Slavyansk, a flashpoint east Ukrainian town held by rebels since mid-April, armoured military vehicles drove past an abandoned roadblock in flames to take up position, AFP reporters saw.
Shots were heard as a helicopter flew overhead, and the pro-Kremlin rebels ordered all civilians out of the town hall to take up defensive positions inside.
Earlier today, Ukrainian special forces seized back control of the town hall in the southeastern port city of Mariupol with no casualties, Interior Minister Arsen Avakov said. Separatist sources confirmed the loss of the building in the port city, whose population is 500,000.
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An army base in the eastern town of Artemivsk overnight also repelled an attack by heavily-armed rebels using machine-guns and grenades, the interior and defence ministries said. One soldier was wounded.
Putin called the armed operation a crime.
"If Kiev has really begun to use the army against the country's population... That is a very serious crime against its own people," he said, calling Kiev's authorities a "junta".
He warned of "consequences, including for our intergovernmental relations".
Russia, which has an estimated 40,000 troops massed on Ukraine's border, has already threatened to respond like it did when it invaded Georgia in 2008 if it sees its interests in Ukraine attacked.