Ukraine on ‘full combat mode’

Pro-Russia activists storm several official buildings in the eastern Ukrainian city of Luhansk and fire on police headquarters. Sarah Toms reports.

Combat mode ... An armed pro-Russian activist stands guard at a checkpoint near the south eastern Ukrainian city of Slavyansk. Source: AFP

UKRAINE'S armed forces are on "full combat alert" against a possible Russian invasion, Kiev says, as pro-Kremlin insurgents tightened their grip on the increasingly chaotic east of the country.

Rebels stormed the regional police building and town hall in the eastern Ukrainian city of Gorlivka, local officials said, bringing to more than a dozen the number of locations under their control.

The new seizure followed clashes in nearby Lugansk late on Tuesday, as hundreds of pro-Russia protesters, spearheaded by a heavily armed mob, took control of the police station.

Ready for action ... Unknown ultranationalists activists march towards the Independence Square to commemorate "Maidan heroes" in Kiev. Source: AFP

Ukraine's interim president, Oleksandr Turchynov, told his cabinet the nation's armed forces were on "full combat alert" as fears grew in Kiev that Russia could mount an armed invasion of the former Soviet republic.

"The threat of a Russia starting a war against mainland Ukraine is real," he said.

Turchynov urged "Ukrainian patriots" to bolster the beleaguered police force, which he has criticised for "inaction and in some cases treachery".

Roads manned ... A pro Russian masked armed militant inspects a car near Slovyansk, eastern Ukraine. Source: AP

The West has accused Russia of fomenting the crisis and backing the rebels, and has imposed sanctions to try to get Moscow to back down.

The United States and European Union members see the insurgency as a bid to destabilise Ukraine before presidential elections slated for May 25, but Moscow denies it has a hand in the rebellion.

President Vladimir Putin insisted to reporters late on Tuesday that there were "neither Russian instructors, nor special units, nor troops" operating in Ukraine.

Buildings taken over ... Pro-Russian gunmen guard inside an administration building they seized in Luhansk, one of the largest cities in eastern, Ukraine. Source: AP

Opening another front in the war of words between Washington and Moscow, Putin warned the sanctions against his country could harm Western interests in Russia's lucrative energy sector.

At a regional summit in Minsk, Putin said: "If this continues, we will of course have to think about how (foreign companies) work in the Russian Federation, including in key sectors of the Russian economy such as energy."

His comments threaten the operations of some of the world's biggest energy companies in the resource-rich country. Among those targeted by the US sanctions is the president of Rosneft, Russia's top petroleum company and one of the world's largest publicly traded oil companies.

Laying in wait ... A pro Russian masked armed militant guards barricades near Slovyansk, eastern Ukraine. Source: AP

The EU said talks with Russia and Ukraine would take place in Warsaw on Friday to try to resolve a $US3.5 billion ($A3.79 billion) gas bill Gazprom calculates Kiev owes. Putin has threatened to cut off the gas flow to Ukraine if it is not quickly paid.

The tensions are already having an impact on the Russian economy, as the International Monetary Fund announced on Wednesday the country was already "experiencing recession".

The IMF also drastically slashed its 2014 growth forecast for Russia to 0.2 per cent from 1.3 per cent, amid massive capital outflows over the Ukraine crisis.

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