Ukrainian forces killed up to five pro-Moscow rebels on Thursday as they closed in on the separatists' military stronghold in the east, and Russia launched army drills near the border in response, raising fears its troops would invade, according to Reuters.
The Ukrainian offensive amounts to the first time Kiev's troops have used lethal force to recapture territory from the fighters, who have seized swathes of eastern Ukraine since April 6 and proclaimed an independent "People's Republic of Donetsk," Reuters reported.
Ukraine's acting president accused Moscow of supporting "terrorism at the state level" against his country for backing the rebels, who the government blames for kidnapping and torturing a politician found dead on Saturday, according to Reuters.
The Ukrainian Interior Ministry said its forces backed by the army had removed three checkpoints manned by armed groups in the separatist-controlled city of Slaviansk, Reuters reported.
"During the armed clash up to five terrorists were eliminated," it said in a statement, adding that one person had been wounded on the side of the government forces, according to Reuters.
The Kremlin, which says it has the right to invade its neighbor to protect Russian speakers, has built up forces on Ukraine's border, which is estimated by NATO at up to 40,000 troops, Reuters reported.
Defence Minister Sergei Shoigu announced Moscow had launched military drills near the border in response to "Ukraine's military machine" and NATO exercises in eastern Europe. Kiev demanded an explanation within 48 hours of action on the border, according to Reuters.
In St Petersburg, Putin said that if the authorities in Kiev had used the army in eastern Ukraine, it would be a very serious crime against their own people, Reuters reported.
"It is just a punitive operation and it will of course incur consequences for the people making these decisions, including (an effect) on our interstate relations," Putin said in a televised meeting with regional media, according to Reuters.
Washington criticized the Russian drills on the frontier. It was "exactly the opposite of what we have been calling on the Russians to do, which is to de-escalate the situation," Pentagon spokesman Colonel Steve Warren said, Reuters reported.