Ukrainian rebels are receiving new military equipment and troops trained in Russia, and will launch a major counter-offensive against government forces, a separatist leader said in a video released on Saturday.
The four-month conflict in eastern Ukraine has reached a critical phase, with Kiev and Western governments watching nervously to see if Russia will intervene in support of the increasingly besieged rebels - an intention Moscow denies.
Alexander Zakharchenko, prime minister of the self-proclaimed Donetsk People's Republic, said the rebels were in the process of receiving some 150 armored vehicles, including 30 tanks, and 1,200 fighters who he said had spent four months training in Russia.
"They are joining at the most crucial moment," he said in a video recorded on Friday. He did not specify where the vehicles would come from.
Moscow has come under heavy Western sanctions over its annexation of Ukraine's Crimea and accusations it is supporting separatists in east Ukraine with troops and funds. Russia denies the accusations.
Zakharchenko's comments came a day after Ukraine said it partially destroyed an armored column that had crossed the border from Russia. The report triggered a sell-off in global stocks, with markets fearful it could escalate the conflict into an open confrontation between Russia and Western-backed Ukraine.
But Moscow made no threat of retaliation, instead saying it was a "fantasy" that its armored vehicles had entered Ukraine. In Washington, the White House said it could not confirm that Russian vehicles had been attacked on Ukrainian soil.
The rebels, who have ceded ground to government forces in the past weeks, have been promising a counter-offensive for several days but have yet to launch one.
Ukrainian native Zakharchenko took over from Russian citizen Alexander Borodai last week and his combative comments will probably dash hopes that changes at the top of the rebel leadership might signal willingness to end hostilities.
A Reuters reporter in Donetsk, one of two rebel strongholds in the east, said the sound of explosions was audible in the city center.
A convoy of 280 Russian trucks carrying water, food and medicine remained about 20 km (12 miles) from the Ukrainian border, unmoved since Friday, and an official of the International Committee of the Red Cross was due to discuss its next movements with Russian and Ukrainian officials.
Russia says it is a purely humanitarian mission in support of civilians in areas hit by the conflict, but Ukraine is concerned it could serve as a Trojan Horse to infiltrate military supplies or create a pretext for armed intervention.
The conflict has dragged relations between Russia and the West to their lowest point since the Cold War and set off a round of trade restrictions that are hurting struggling economies both in Russia and Europe.
The Finnish President, Sauli Niinisto, traveled to Kiev for talks with Ukrainian President Petro Poroshenko, a day after meeting Russian President Vladimir Putin.
France said a meeting of Ukrainian, Russian, German and French foreign ministers scheduled in Berlin on Sunday could be a first step towards a peace summit.
The United Nations said this week that an estimated 2,086 people had died, with nearly 5,000 wounded.
A rebel Internet news outlet said on Saturday that separatist fighters had killed 30 members of a Ukrainian government battalion in fighting in Luhansk province, a rebel-held area of eastern Ukraine adjacent to the Russian border.
A Ukrainian military spokesman, Andriy Lysenko, contradicted the rebel assertions. He said three Ukrainian servicemen had been killed over the past 24 hours, and denied Kiev's forces were firing artillery on Donetsk.
In the past few hours Ukrainian security forces had spotted Russian drones and a helicopter crossing illegally into Ukraine's airspace, Lysenko told a news briefing.
MOMENTUM WITH THE ARMY
The momentum on the ground is with the Ukrainian forces, who have pushed the separatists out of large swathes of territory and nearly encircled them in Donetsk and Luhansk. Kiev says it now controls the road linking the two cities.
Russia says the Ukrainian offensive is causing a humanitarian catastrophe for the civilian population in the two cities. It accuses Kiev's forces of indiscriminately using heavy weapons in residential areas, an allegation Ukraine denies.
In the past seven days, three of the most senior rebel leaders have been removed from their posts, pointing to mounting disagreement over how to turn the tide of the fighting back in their favor.
Lysenko, the Ukrainian military spokesman, said he had reports of rebel fighters abandoning their posts in Luhansk, and preparing to leave Donetsk and seek safe haven in Russia.
"A mood of panic is spreading and rebels are trying to leave through the small gaps that remain," he said.
In Donetsk, the red, blue and black flag of separatists was flying on a pole in front of the headquarters. Ten people armed with Kalashnikov rifles were standing on guard outside the main entrance in mismatched camouflage.
"Why should we flee? People are still coming and filling our ranks. Those who have lost their houses to Ukrainian shelling, what else would they do but fight back?," said a fighter who gave his name as Communist.