Ukrainian forces clashed with pro-Russian militants as they closed in on the separatist-held city of Slaviansk on Thursday, seizing rebel checkpoints and setting up roadblocks as helicopters circled overhead.
Reuters journalists saw a Ukrainian military detachment with five armoured personnel carriers take over a checkpoint on a road north of the city in late morning after it was abandoned by separatists who set tyres alight to cover their retreat.
No shots were heard during that takeover but the Ukrainian Interior Ministry said that its forces and troops from the Defence Ministry had killed "up to five terrorists" while destroying three militant checkpoints northeast of the centre.
A separatist spokeswoman in Slaviansk said early in the morning that two fighters were killed in clash in the same area, near a road leading to the town of Sviatogorsk.
Ukraine's government said it took back Sviatogorsk from gunmen on Wednesday as it relaunched an "anti-terrorist" operation to regain control of the Russian-speaking east.
It was unclear if Ukrainian troops were preparing to risk storming Slaviansk, a city of 130,000 that has become the military stronghold of a movement seeking annexation by Moscow of the Russian-speaking, industrial regions of eastern Ukraine.
For the past few weeks, they have held back from combat, saying they were concerned about civilian casualties - and about provoking reprisals from Russia, which does not recognise the new Ukrainian government and has warned that it would move to protect Russian-speakers in the east, as it did in Crimea.
As the offensive at Slaviansk was confirmed, Russian President Vladimir Putin said it would be a very serious crime for Ukraine to use its army in the east and said there would be "consequences".
The troops could be planning to impose a cordon around the city to disrupt militants' contacts with the rest of the region and to promote surrender negotiations that have been begun by European OSCE monitors following an international accord signed by Russia and Ukraine's Western allies a week ago in Geneva.
The soldiers seen by Reuters near the village of Krestyshche had arrived from the direction of Sviatogorsk. They appeared disciplined and well-armed, wearing camouflage with black body armour and black helmets with riot visors.
To the south of Slaviansk, Reuters saw dozens of Ukrainian airborne troops with armoured assault vehicles digging in and manning a checkpoint on the main road to the regional capital, Donetsk. At Artemivsk, on the same road, the Interior Minister said troops had repelled an attack on their base by a group of about 70 militants who he said were led by Russian soldiers.
Moscow denies having forces in eastern Ukraine.
(Additional reporting by Alexander Reshetnikov in Slaviansk and Alastair Macdonald in Kiev; writing by Alastair Macdonald; editing by Philippa Fletcher)