Russia’s President, Vladimir Putin, called for immediate talks on the “statehood” of south-east Ukraine on Sunday, using the inflammatory term just hours after the European Union threatened deeper sanctions unless the Kremlin stopped providing troops and assistance to separatists.

His remarks came as reports emerged on Sunday night of Ukrainian soldiers being ambushed and killed after pro-Russian forces allegedly reneged on an agreement to allow them to leave the besieged town of Ilovaisk, 20 miles east of Donetsk. “We came from Ilovaisk bearing white flags,” one Ukrainian soldier told the AP news agency. “They shot us from all sides. We were not engaged in military actions. We were just on the move.”

The EU has given Russia a week to halt its military activities in Ukraine or face more damaging measures targeting its economy, and hawkish states will be looking for a verifiable withdrawal of troops and tanks. However, EU nations with closer ties to Russia will be keen to read a more conciliatory tone in Mr Putin’s remarks, as they fear more sanctions could hurt their economies too.

Shortly after the EU’s ultimatum, Mr Putin said: “Substantive, meaningful talks should begin immediately not about technical issues but about the question of the political organisation of society and statehood in south-east Ukraine… safeguarding the legitimate interests of those people who live there.” His use of the term “statehood” could be read in Kiev as implicit backing for rebel demands for independence. However, a spokesperson for the President said Mr Putin believed the rebel strongholds should remain part of Ukraine, and claimed the Kremlin was pushing for a “political settlement” to the crisis through negotiations with all sides.

Ukraine crisis: Civilians targeted in Donetsk Show all 11 1 /11 Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis An injured man hugs a woman as they sit in an ambulance after shelling in the main separatist stronghold of Donetsk, eastern Ukraine. Three civilians had been killed in shelling in eastern Ukraine's Donetsk, where Kiev's army is fighting pro-Russian separatists, AFP correspondents saw AFP PHOTO / DIMITAR DILKOFF Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis Local residents sit in a basement used as a shelter from artillery fire, in the settlement of Makiivka, on the outskirts of Donetsk. Artillery fire could be heard on Tuesday in Makiivka, on the eastern outskirts of the rebel-controlled city of Donetsk, Reuters reporters at the scene said REUTERS/Maxim Shemetov Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis Pro-Russian separatist troops run away from a burning car after Ukranian army shelling in Donetsk, Ukraine EPA/VALENTIN EGORSHIN Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis Ukrainian soldiers park their hardware on roadside as they are waiting for the start of the march into the town of Mariupol, eastern Ukraine. Heavy shelling hit a town of Novoazovsk in southeastern Ukraine on the third day of an assault that has forced government troops to spread their ranks thinner along the Russian border AP Photo/Sergei Grits Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis The body of a woman lies on the ground after a shelling in the main separatist stronghold Donetsk. Three bodies, identified by bystanders as members of the same family, were seen in a residential neighbourhood east of the city centre DIMITAR DILKOFF/AFP/Getty Images Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis Ukrainian soldiers park their hardware on roadside as they are waiting for the start of the march in the town of Mariupol, eastern Ukraine AP Photo/Sergei Grits Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis Armed pro-Russian separatists speak with local residents on a street in the settlement of Makiivka, on the outskirts of Donetsk REUTERS/Maxim Shemetov Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis A car burns after Ukranian army shelling in Donetsk, Ukraine. Ukrainian President Petro Poroshenko said on the sidelines of a summit in Minsk that he wanted to find a compromise to end the bloodshed that includes the interests of the people in eastern Ukraine EPA/VALENTIN EGORSHIN Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis Local residents wait in a basement used as a shelter from artillery fire, in the settlement of Makiivka, on the outskirts of Donetsk REUTERS/Maxim Shemetov Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis An armed pro-Russian separatist checks papers of a local resident on a street in the settlement of Makiivka REUTERS/Maxim Shemetov Ukraine crisis: Civilians targeted in Donetsk Ukraine crisis A paramedic assists an injured man after shelling in the main separatist stronghold of Donetsk. German Chancellor Angela Merkel pushed for a new ceasefire in crisis talks with Ukrainian President Petro Poroshenko as a controversial Russian convoy returned home DIMITAR DILKOFF/AFP/Getty Images

Since the crisis in Ukraine escalated with the Russian annexation of Crimea in March, the Kremlin has frequently responded to Western ultimatums by making a few conciliatory gestures, albeit ones which have had little effect on the situation on the ground.

Fighting has raged in the east since April, with nearly 2,600 people killed.

On Sunday, while Ukrainian forces and local residents were building trenches and preparing for a rebel assault in the port town of Mariupol, separatists fired on a Ukrainian vessel in the Azov Sea, in the first naval attack of the four-month conflict. A Ukrainian military spokesman said a rescue operation was under way after the artillery attack from the shore.

EU leaders went into their discussions on Saturday after warnings from President Petro Poroshenko that his country was on the brink of “full-scale war”.

Any Russian invasion of its neighbour beyond the annexation of Crimea had been a clear red line for deeper EU sanctions. But familiar splits emerged between states pushing a tough reaction and those advocating caution, and the summit conclusions avoided speaking of an invasion and referred to “aggression by Russian armed forces on Ukrainian soil”.

Instead of approving another round of sanctions targeting key Russian economic sectors, the EU gave President Putin a week to show progress towards de-escalating the conflict. During the coming days, the EU’s executive arm and foreign service will draw up a list of potential sanctions targets.

Pro-Russian forces allegedly reneged on an agreement to allow Ukrainian soldiers to leave the besieged town of Ilovaisk (AP)

“There will be decisions about new sanctions, if the current situation goes on or deteriorates,” said the German Chancellor, Angela Merkel.

However, there was little clarity about exactly what any new sanctions would be. In July, the EU responded to the downing of Flight MH17 over rebel-held territory in Ukraine by targeting wholesale sectors of the Russian economy. Until then, the US and EU had been gradually adding names of individuals and companies under asset freezes and travel bans. The EU measures in July targeted some financial services, banned future arms sales to Russia and restricted the export of some equipment for oil exploration. Russia’s lucrative gas industry remained untouched, with many eastern European states heavily reliant on Russian energy.

A diplomat close to the talks said any new sanctions would focus on the same three areas – defence, energy and financial services – potentially closing loopholes from the first round. But while Britain, Germany, Poland and the Baltic states were pushing for strong action, nations including Hungary and Slovenia are more cautions, wary of the impact on their economies.

Video: 'Point of no return is full-scale war' - Petro Proshenko

Some leaders in the EU and US are pushing for military assistance to the Ukrainian forces, with Democratic Senator Robert Menendez yesterday calling for Washington to consider sending weapons “that will impose a cost upon Putin for further aggression”.

Mr Putin has always denied that Russian troops are on Ukrainian soil, but has criticised the Ukrainian military operation to regain control of the east and defended the Russian-speaking minority’s right to defend themselves.

Asked on state TV yesterday if he saw an end to the crisis, he replied: “No. It largely depends on the political will of current Ukrainian authorities. Russia cannot stand aside when people are being shot at almost at point blank.”