Ukraine on the brink as Russian tank column takes control of airport
Kiev forces retreated from Luhansk airport after battling a "Russian armed forces" tank column, Kiev said.
Ukrainian president Petro Poroshenko described it as the latest stage of Moscow's "direct and open aggression".
The battle came ahead of a key meeting between Russia and Ukraine in Minsk, the Belarus capital.
"In the Luhansk direction, Ukrainian forces have received an order and have pulled back from the airport," Ukraine army spokesman Andriy Lysenko told reporters.
He said seven Ukrainian service personnel had been killed in the past 24 hours. 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.
Ukraine's defence minister Valeriy Geletey said that Russian units are moving into other towns in the region, including the largest city of the region, Donetsk. "The information that Russian troops are there has been confirmed," he said.
"We are fighting Russia and it is Russia which is deciding what will happen in Donbass," he told Ukraine's Inter channel.
"We are holding talks not with terrorists but with representatives of the Kremlin," he added.
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.
The diplomatic row between Moscow and Kiev over the fighting in eastern Ukraine escalated as Russia's foreign minister Sergei Lavrov called for the Minsk talks to discuss an "immediate and unconditional" ceasefire.
The call was seen as a rejection of Mr Poroshenko's proposed peace plan, which would involve pro-Russian separatists agreeing to demilitarise.
"I am very much counting upon the negotiations set for today, to above all focus on agreeing an immediate and unconditional ceasefire," Mr Lavrov said a meeting with university students according to Russian news agencies.
"We need to sit down and talk, and not insist upon unrealistic demands that the rebels give up their weapons and let themselves be killed," he said while meeting with students of the Moscow State Institute of International Relations.
"That is all what Petro Alexeyevich Poroshenko's peace plan is driving at."
Separately, Russian president Vladimir Putin claimed Europe is ignoring the Ukrainian army "directly targeting" civilians in eastern Ukraine.
The Ukrainian military "is directly targeting its fire on residential areas" and "unfortunately many countries, including in Europe, prefer not to notice that", he said from the eastern Siberian city of Yakutsk in comments broadcast on Russian television.
Putin characterised the goal of rebel operations as protecting civilians.
"The goal of the rebel forces is to push back [Ukrainian] armed forces and artillery so they cannot fire on residential areas," he said.