Ukraine's security and defense council said the border town of
Novoazovsk and other parts of Ukraine's south-east had fallen under
the control of Russian forces who together with rebels were staging
a counter-offensive.
"A counter-offensive by Russian troops and separatist units is
continuing in south-east Ukraine," the council said in a post on
Twitter.
President Petro Poroshenko, in a statement explaining his decision
to cancel a visit to Turkey, said: "An invasion of Russian forces
has taken place."
Russia denies intervening in Ukraine by arming the rebels or sending
soldiers across the border. The defense ministry declined to comment
on reports of Russian tanks in Novoazovsk.
“The Russian authorities clearly said many times there are no
regular Russian troops there. Russia is not taking part in this
armed conflict,” said a Russian diplomatic source.
The latest escalation in the five-month crisis came only two days
after the presidents of the two countries held their first talks in
more than two months and agreed to work towards launching a peace
process.
Ukrainian Prime Minister Arseny Yatseniuk appealed to the United
States, European Union and G7 countries "to freeze Russian assets
and finances until Russia withdraws armed forces, equipment and
agents".
Rebel advances this week have opened a new front in the conflict
just as Ukraine's army appeared to have gained the upper hand,
virtually encircling the separatists in their main strongholds of
Donetsk and Luhansk.
Anton Gerashchenko, an adviser to Ukrainian Interior Minister Arsen
Avakov, said on Facebook: "The invasion of Putin’s regular Russian
army of Ukraine is now an established fact!"
French President Francois Hollande said it would be "intolerable and
unacceptable" if it was proved true that Russian troops had entered
Ukrainian territory.
TANKS IN NOVOAZOVSK
The loss of Novoazovsk is a blow to government forces since it
leaves vulnerable the big port city of Mariupol, further west along
the coast.
A resident who would only give his first name of Mykola, said: "The
authorities in the town are DNR (rebel Donetsk People's Republic)
ones. Tanks are moving here and there out on the highway, but there
is no fighting going on for the town."
A military source said the separatist forces had also taken
Savur-Mohyla, a hill east of the city of Donetsk which gives
strategic command over large areas of the territory.
Alexander Zakharchenko, prime minister of the self-proclaimed
Donetsk People's Republic, told Reuters in an interview that the
rebel forces had gained a foothold on the Azov Sea and their
objective was to fight their way to Mariupol.
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He said there were about 3,000 Russian volunteers serving in the
rebel ranks. The latest developments, and the capture by Ukraine
this week of 11 Russian soldiers on its territory, have strained the
credibility of Russia's denials that it is sending weapons and
soldiers to help the separatists. Russia said the first group of 10
soldiers had probably crossed the border by mistake.
The crisis has prompted Western governments to impose sanctions on
Moscow, which has responded in kind, and fanned tensions with NATO
to levels not seen since the Cold War.
In a tweet, the U.S. ambassador to Kiev, Geoffrey Pyatt, said:
"Russian supplied tanks, armored vehicles, artillery and multiple
rocket launchers have been insufficient to defeat Ukraine' armed
forces. So now an increasing number of Russian troops are
intervening directly in fighting on Ukrainian territory.
"Russia has also sent its newest air defense systems including the
SA-22 into eastern Ukraine & is now directly involved in the
fighting," he said.
On financial markets, Ukrainian credit default swaps, a form of
insurance against the government failing to pay its debt, surged to
new three-month highs and dollar bonds fell.
Russia's dollar-denominated RTS share index was down 2.4 percent and
the rouble-based MICEX fell 2.1 percent. The rouble also weakened,
and Russian debt insurance costs rose to two-week highs. Fighting in the east erupted in April, a month after Russia annexed
Ukraine's Crimean peninsula in response to the toppling of a
pro-Moscow president in Kiev.
A United Nations report this week said more than 2,200 people have
been killed, not including the 298 who died when a Malaysian
airliner was shot down over rebel-held territory in July.
(Additional reporting by Vladimir Soldatkin, Thomas Grove; Writing
by Mark Trevelyan; editing by Anna Willard and Giles Elgood)
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