Pro-Russian separatists ambushed Ukrainian forces on Monday, triggering heavy fighting on the outskirts of the rebel stronghold of Slaviansk, Interior Minister Arsen Avakov was quoted as saying.
A Reuters correspondent said at least two separatist armoured personnel carriers and several rebels fled the area, where almost continuous gunfire had been heard since morning.
The gunfire seemed closer to Slaviansk, in eastern Ukraine, than a day earlier.
"In the morning, a squad in the anti-terrorist operation was hit by an ambush by terrorist groups. They are using heavy weapons," Avakov was quoted as saying by Interfax-Ukraine news agency near Slaviansk.
He said there were fatalities on the Ukrainian side but did give a figure.
Pro-Russian separatists have seized key buildings in several cities and towns in eastern Ukraine, where many people are Russian speakers, since the ouster of President Viktor Yanukovich by pro-Western leaders in Kiev in February.
(Reporting by Maria Tsvetkova, Writing by Elizabeth Piper, Editing by Timothy Heritage)