Pro-Russian rebels shot down two Ukrainian helicopters near separatist-held Slaviansk, killing two crew members, while Moscow accused Kiev of wrecking hopes of peace by launching a "criminal" assault to retake the eastern town.

In the southern port of Odessa, one man was shot dead in clashes between supporters of Ukrainian unity and pro-Russian activists, police said. Protesters threw petrol bombs, paving stones and explosive devices during the disturbances.

Though Ukrainian forces embarked on one of their most concerted military operations yet, their advance on the ground in the east was limited. Nevertheless, President Vladimir Putin's spokesman accused Kiev of firing on civilians from the air in a "punitive operation" that destroyed an international peace plan.

Russia was "extremely worried" about the fate of Russians in the eastern Ukrainian town, including an envoy sent to help free German and other foreign hostages, the Kremlin spokesman said.

The dramatic language seemed to raise the stakes, as Moscow has tens of thousands of troops massed on the border and claims the right to invade if needed to protect Russian speakers.

Ukraine's acting president said Russian "armed saboteurs" had tried to cross into the country overnight, but were pushed back by Ukrainian border troops. He gave no further details.

His Western-backed government rejected Russia's interpretation of events, saying Moscow was supporting groups in eastern Ukraine who were "putting civilians in danger, seizing hostages and creating an atmosphere of terror and violence".

Reuters journalists in Slaviansk, the most heavily fortified bastion of pro-Russian separatists in eastern Ukraine, heard shooting break out and saw one helicopter opening fire before dawn. Ten hours later, the city was largely quiet, with shops shut and armed separatists in control of the streets.

Advancing Ukrainian forces in armoured vehicles took up positions closer in to the suburbs, but rebels still controlled most of the town of 130,000.

Acting President Oleksander Turchinov said the operation had been complicated by the rebels' use of human shields and had not progressed as quickly as had been hoped.

The separatist pro-Russian militants had made more moves on Thursday, seizing a rail control centre for the Donetsk region, a railway official said. By cutting off power, they had all but paralysed train traffic.

Kiev said the firing of missiles that brought down its helicopters was evidence that Russian forces were present in the town. Moscow denies that its troops are on the ground.

Nonetheless, Kremlin accounts of grave threats to civilians highlight the risk of a Russian move to seize territory ahead of a vote the rebels aim to hold on May 11 seeking a mandate to break with Kiev, like one held in the Crimea region before Moscow annexed it in March.

For Russians, the Kremlin's rhetoric of "fascists" in Kiev launching a "punitive operation" evokes the depredations of Nazi German invaders in World War Two, being given extensive state media coverage as next week's anniversary of the Soviet victory is used to foster national pride and nostalgia.

On the square outside city hall in Slaviansk, about 100 people gathered today and said they were appealing to Putin to send troops to help them.

Businesswoman Tamara Voshchanaya said: "What can you think when the sound of cannon makes you jump out of bed, when helicopters are flying over and shooting at our guys?

On the town's southern outskirts, eight Ukrainian armoured personnel carriers cut off the road but faced a cordon two deep of local residents shouting at them to go home.

Some rebels threw up new barricades of felled trees.

Putin's popularity has soared with the seizure of Crimea and talk of restoring Moscow's former empire. This week he restored the Soviet-era tradition of holding a May Day parade on Red Square, where marchers carried banners hailing the acquisition of Ukrainian territory.

US Defence Secretary Chuck Hagel said NATO's European members needed to increase their defence spending in light of Russia's action in Ukraine.

The European Union said it was watching events in eastern Ukraine with growing concern. But Kiev is not a member of NATO and Western leaders have made clear they will not fight to defend Ukraine.

The Ukrainian Defence Ministry said two Mi-24 attack helicopters had been shot down by shoulder-launched anti-aircraft missiles while on patrol overnight around Slaviansk. Two airmen were killed and others wounded.

Other Ukrainian officials and the separatist leader in Slaviansk said earlier that one airman was taken prisoner.

A third helicopter, an Mi-8 transport aircraft, was also hit and a serviceman wounded, the Defence Ministry said. The SBU security service said this helicopter was carrying medics.

Ukrainian officials said their troops overran rebel checkpoints and Slaviansk was now "tightly encircled".

Putin's spokesman heaped blame on the Ukrainian government, which took power two months ago after pro-Western protests forced the Kremlin-backed elected president to flee to Russia.

Noting that Putin had warned before that any "punitive operation" would be a "criminal act", Dmitry Peskov told Russian news agencies that this was what had now happened at Slaviansk.

Peskov said Moscow had not heard from an envoy, Vladimir Lukin, sent to southeast Ukraine to negotiate the release of European military observers held by the rebels, but RIA Novosti news agency said later his aide had confirmed he was fine.

"While Russia is making efforts to de-escalate and settle the conflict, the Kiev regime has turned to firing on civilian towns with military aircraft and has begun a punitive operation, effectively destroying the last hope of survival for the Geneva accord," he said, referring to a deal on April 17 signed by Russia, Ukraine, the United States and the European Union.

Under that agreement, separatists were supposed to lay down their arms and vacate the public buildings they have seized in about a dozen towns they have seized across the Russian-speaking east. Since then, however, they have tightened their grip.

Ukraine's Interior Ministry said it persuaded separatists to leave two buildings in the city of Luhansk on Friday.

The SBU said the deadly use by the separatists of shoulder-launched anti-aircraft missiles was evidence that "trained, highly qualified foreign military specialists" were operating in the area "and not local civilians, as the Russian government says, armed only with guns taken from hunting stores".

On his Facebook page, Interior Minister Arsen Avakov posted: "The goal of our anti-terrorist operation and, at the same time, our demands to the terrorists are simple:

"Free the hostages, lay down weapons, vacate administrative buildings and get municipal infrastructure back to normal."

The rebels said they had the upper hand.

"They wanted to carry out some small-scale tactical operations just to scare the people," said a militant manning a checkpoint leading to the army-held airfield.

"But so far things have not worked out the way they wanted."

Reuters