Ukrainian government forces were on Friday said to be conducting operations around the city of Slavyansk in the country's east, with pro-Russia separatists claiming a "large-scale" assault to retake the town was under way.

A Reuters photographer said he saw a military helicopter open fire on the outskirts of the town and a reporter heard gunfire. Fighting was being reported at checkpoints.

In Kiev an aide to the Ukrainian interior minister, Arsen Avakov, said he could not comment. "Until it's over no one will say anything," he said.

Vyacheslav Ponomarev, regarded by the pro-Russia insurgents as mayor of Slavyansk, said two helicopters were shot down and a pilot taken hostage. Details could not be independently confirmed.

Slavyansk is 100 miles (160km) west of Russia. Seven European observers from the Organisation for Security and Cooperation in Europe remain held by pro-Russia gunmen in the city.

Armed groups seeking union with Russia have seized a number of government buildings in towns in eastern Ukraine.

Vladimir Putin, the Russian president, on Thursday called for Ukrainian troops to pull out of the south-east in a conversation with Angela Merkel.

The Russian president said military withdrawal, an end to violence and a national dialogue were the key issues in Ukraine, according to a Kremlin briefing on the phone conversation.

A spokesman for Merkel said the focus of the call had been the German chancellor asking for Putin's assistance in freeing seven observers from the Organisation for Security and Co-operation in Europe who are being held by pro-Russia separatists in eastern Ukraine. The Kremlin said Merkel initiated the call.

A crowd of pro-Russians hurling rocks and Molotov cocktails took control of the prosecutor's office in Donetsk on Thursday as Kiev's hold on the east continued to ebb away.

Several of the 100 police officers guarding the building were injured and in some cases severely beaten as they were stripped of their weapons and shields. The pro-Russians hoisted the Russian flag, barricaded the front door and burned Ukrainian symbols in the street.

The Russian foreign ministry said earlier on Thursday that a proposal from Ukraine's prime minister, Arseniy Yatsenyuk, to hold a poll on Ukrainian unity and territorial integrity was a sham that would only deepen the crisis in the country.

On Wednesday Yatsenyuk said the Kiev government would send to parliament a law on conducting the nationwide poll on 25 May, when the country is also due to hold a presidential election.

The Russian foreign ministry said the plans were "cynical" given what it said was Kiev's military operation against "its own people".