A spokesman for Vladimir Putin said the Geneva agreement to defuse the situation in eastern Ukraine was no longer viable after Kiev launched a military operation against the rebel-held city of Slavyansk on Friday.

The Ukrainian military launched its first serious offensive to retake the city, which is being held by pro-Russia militia, early on Friday morning. The rebel militia said Ukrainian troops had launched attacks on several checkpoints. Ukraine's defence minister, Arsen Avakov, said his forces had taken control of nine checkpoints to form a "tight ring" around the city.

Two Ukrainian helicopters were shot down and their pilots killed, both Russian and Ukrainian media reported. One militant was killed and another injured, according to the reports. Ukraine's security service said one helicopter had been brought down by a surface-to-air missile, citing this as evidence that Slavyansk's defenders were not just citizens who had armed themselves.

In an address to the nation, acting Ukrainian president Oleksandr Turchynov said two Ukrainian soldiers had been killed and seven injured in the course of the operation. He also said that "many" were killed on the other side.

"Criminals received big losses during the operation: many were killed, wounded and arrested," he said, giving no further details.

Turchynov promised amnesty to all armed separatists who had not committed grave crimes and agreed to surrender.

Pro-Russia rebel leader Vyacheslav Ponomarev denied claims by Ukraine's ministry of defence that four miliants who had shot at helicopters had been captured.

"Basically, at the same time that Russia is taking pains to de-escalate and regulate the conflict, the Kiev regime has begun shooting up peaceful towns with military helicopters and has started a punitive operation, essentially destroying the last hope for the viability of the Geneva agreement," Putin's spokesman, Dmitry Peskov, said.

"Earlier, when he was still in Minsk, Putin called the possible operation a criminal action. Unfortunately, the development of events completely confirms this appraisal."

Russia, Ukraine, the US and the EU agreed in Geneva last month on a series of steps to reduce tensions in eastern Ukraine, where pro-Russia protesters and militia have seized government buildings in at least a dozen towns and cities.

The agreement called on illegal armed groups to lay down their weapons and vacate buildings in exchange for a broad amnesty, but since it was signed, Kiev and Moscow have accused each other of not pressuring their supporters to disarm.

The US and EU have both imposed sanctions in response to what they said was Russia's failure to force pro-Kremlin militia in eastern Ukraine to stand down. Angela Merkel arrives on Friday in Washington for talks with Barack Obama; the Ukraine crisis is expected to feature.

Fears remain that fighting in eastern Ukraine could trigger a Russian invasion. In a telephone conversation with the German chancellor on Thursday, Putin said Kiev should pull its forces back from the eastern and southern regions of the country. Russia has been massing tens of thousands of its own troops on the border amid warnings it could intervene to protect Russian speakers in Ukraine.

In a statement on Friday, Russia's foreign ministry accused the Ukrainian military of launching rocket strikes at protesters and claimed it had used ultranationalists from the group Right Sector and "English-speaking foreigners", who it suggested were American mercenaries.

"As we have warned many times before, the use of the army against its own people is a crime and is leading Ukraine to catastrophe," the statement said.

"By supporting the organisers of the Kiev coup in their strategy of violently putting down protests, the US and EU are taking on a huge responsibility, essentially closing the door to a peaceful solution to the crisis," it added.

On Monday, Russian defence minister Sergei Shoigu said Russia had moved back its forces to their home bases, but a Nato official later said the alliance had seen no indication of such a withdrawal.

During the telephone call, Merkel called on Putin to throw his weight behind attempts to free seven international observers from the Organisation for Security and Cooperation in Europe who are being held by militia in Slavyansk. Putin dispatched Russia's former human rights ombudsman on Thursday to try to negotiate their release