Kiev: Ukraine`s military said on Monday its forces were battling a Russian tank battalion for control of a vital airport in the east of the country as President Petro Poroshenko accused Moscow of "direct and open aggression" against his country.
Ukrainian coastguards meanwhile searched for two seamen missing after one of their patrol boats was sunk in the Sea of Azov by artillery fire from pro-Russian separatists on the shore.
Eight other seamen survived Sunday`s attack and were being treated for wounds and burns, a border guard official said.
Several hundred Ukrainian forces are bogged down near Ilovaysk, east of the region`s main city of Donetsk, and have been trying to break out of encirclement by Russian-backed separatists for several days.
Poroshenko, speaking at a military academy in Kiev, said Russia`s direct involvement in the war against the separatists in eastern Ukraine had tipped the balance on the battlefield and was the main reason for recent reversals.
"Direct and open aggression has been launched against Ukraine from a neighbouring state. This has changed the situation in the zone of conflict in a radical way," he said.
Poroshenko said there would be changes in the military top brass because of the events of last week.
Last week separatists who Kiev says were backed by a Russian armoured column took the town of Novoazovsk in the southeast and are now threatening the strategic port city of Mariupol.
Despite growing concerns, Kiev`s military has imposed an information clampdown on what is happening in Ilovaysk until its forces have been successfully withdrawn.
But Anton Gerashchenko, an interior ministry adviser, told Ukraine TV`s 112 channel: "The tragedy near Ilovaysk became possible after (Russian President Vladimir) Putin brought regular troops into Ukraine."
"In all there were 500 men deployed in Ilovaysk. The Russians came with superior forces, fresh, healthy and with a full ammunition set," he said.
"Our people surrendered only when they had run out of ammunition, when they no longer had anything to fire with," he said. In the past 24 hours, 69 more pro-government fighters had managed to break out and rejoin Ukrainian forces, adding to a few dozen others over the weekend.
Fighting continued to rage near Luhansk, the region`s other main city, for control of the main civilian airport just to its south, the military said in a statement.
"Ukrainian paratroopers are fighting a tank battalion of the Russian armed forces to hold the airport," it said.
In the past 24 hours, the separatists had lost 80 fighters, some armoured vehicles and a missile system. The military gave no figures for Ukrainian losses.
Ukrainian border guards said search operations were still going on for the two missing coastguards whose patrol boat was hit by a rebel shell, in what pro-Russian rebels claimed was the first sea victory of their five-month separatist war.
The boat was hit in the Sea of Azov, the area where rebels are now threatening the main port of Mariupol.
"The cutter has sunk. We managed to save eight sailors, thanks to other cutters coming to their rescue. Seven of them are injured or burned. Two sailors have gone missing. We are continuing rescue operations," the official, Serhiy Astakhov, told Reuters.
"After analysing the situation, we believe that this attack was from an artillery system but we don`t know yet where it was fired from," he said.
A top United Nations human rights official said last week that the total death toll in the five-month conflict - including civilians, Ukrainian forces and separatists - was nearly 2,600.