SLAVYANSK: An operation by Ukrainian forces to reassert control over its eastern regions floundered Wednesday in the face of pro-Russian resistance, a day ahead of international talks on the escalating crisis.

A concerned Nato said it planned to deploy more forces in eastern Europe and called for Russia to stop “destabilising” the former Soviet satellite, which has been in deep turmoil since the ouster of the pro-Kremlin leadership in February.

Russian President Vladimir Putin has warned that Kiev's decision to send in troops this week to put down a separatist uprising in its industrial heartland had dragged the country to the brink of civil war.

In a sign that its plan was backfiring, Ukraine's defence ministry said Moscow-backed militants blocked and seized six armoured vehicles that had been deployed Tuesday in a bid to oust the separatists.

The commandeered vehicles, some flying Russian flags, were then stationed in the centre of the town of Slavyansk surrounded by dozens of armed men in camouflage claiming to be volunteers and Ukrainian army defectors, an AFP reporter said.

In another apparent humbling climbdown in the nearby town of Kramatorsk, Ukrainian troops, some weeping, handed over the firing mechanisms of their rifles to pro-Moscow protesters who had surrounded their column of 14 APCs in return for a promise that they could leave in their vehicles, an AFP reporter said.

As Kiev's push to reclaim authority unravelled, Nato chief Anders Fogh Rasmussen announced that the alliance would deploy additional forces in eastern Europe.

“We will have more planes in the air, more ships on the water... and more readiness on the land,” he said, while adding that a political solution was the only way forward.

The authorities in Kiev ratcheted up the verbal attacks on Russia, with Prime Minister Arseniy Yatsenyuk accusing Moscow of trying to build “a new Berlin wall”.

Yatsenyuk demanded Moscow halt its alleged support for the separatists but said Kiev remained committed to Thursday's crunch talks between the top diplomats of Russia, the European Union, the United States and Ukraine.

“There is only one directive for the Ukrainian foreign ministry, the Russian government has to immediately withdraw its commando groups, condemn the terrorists and demand they leave the installations,” he said.

Ukraine's acting Defence Minister Mykhailo Koval headed out to the east to check on the progress of Kiev's seemingly stalled bid against the separatists.

The military also pledged a firm response after two serviceman were allegedly taken hostage by pro-Russian forces in the Lugansk region.

The Ukrainian Security Service (SBU) said in a statement that Russian commanders in the east had issued pro-Kremlin militants with “shoot-to-kill”orders.

Vitaliy Naida, a spokesman for the service's counter intelligence department, said some 40 Russian spies had been uncovered and stopped since the operation in the east began.

Elsewhere, pro-Moscow gunmen stormed the mayor's office in the regional capital Donetsk, according to an AFP reporter.

'Sharp escalation'

On Tuesday, confident authorities in Kiev launched what they called the “anti-terrorist operation” to much fanfare, sending tanks towards Slavyansk, which has been under the control of pro-Russian gunmen for several days, in a high-risk strategy sharply condemned by the Kremlin but supported in Washington.

The display of military hardware was the most forceful response yet by the Western-backed government to the pro-Kremlin militants' occupation of state buildings in nearly 10 cities across Ukraine's rust belt.

But the move drew a sharp response from Putin in a telephone conversation with German Chancellor Angela Merkel.

“The Russian president remarked that the sharp escalation of the conflict has placed the country, in effect, on the verge of civil war,” the Kremlin said in a statement.

But both Putin and Merkel “emphasised the importance” of Thursday's talks.

The Kremlin described the actions of the Ukrainian army as an “anti-constitutional course to use force against peaceful protest actions” and called on UN chief Ban Ki-moon to condemn the action.

Ban in turn “expressed his alarm about the highly volatile situation in eastern Ukraine” and told Putin that everyone needed to “work to de-escalate the situation”.

But the White House described Ukraine's operation as a “measured” response to a lawless insurgency that had put the government in an “untenable” situation.

Washington also said it was coordinating with its European allies to slap more sanctions on Russia but that new measures were unlikely before the Geneva talks.