Pro-Russian gunmen in Ukraine confirmed on Wednesday that they had taken hostage an American journalist, whom they were holding according to "war rules", they said, in the town of Slavyansk.

Simon Ostrovsky, a correspondent for Vice News, had not been seen since early Tuesday. He had been covering the crisis in Ukraine for several weeks, first in Crimea and then in the east of the country. He had been following the activities of masked gunmen as they seized government buildings.

Ostrovsky had visited Slavyansk several times. The town has been under the control of a heavily armed pro-Russian militia since 6 April.

The rebels have seized the nearby police and security station, as well as the city hall, turning it into a sandbagged garrison, complete with sniper positions. Men suspected to be Russian soldiers have also been spotted in Slavyansk, together with irregular "Cossacks" from southern Russia.

Stella Khorosheva, a spokeswoman for the pro-Russian insurgents, said on Wednesday that Ostrovsky was being held at the local branch of the rebel-occupied Ukrainian security service. Separatists have blockaded access to the building with a large wall of tyres and debris. Outsiders are not admitted.

"He's with us. He's fine," Khorosheva told the Associated Press on Wednesday. Asked why Ostrovsky was being held hostage, she said he was "suspected of bad activities". She did not elaborate but said the insurgents were now conducting their own investigation.

Khorosheva later told journalists that Ostrovsky was suspected of spying for Right Sector, a far-right Ukrainian nationalist party, or other possible "enemy groups".

Since an apparent shoot-out at a Slavyansk checkpoint on Sunday left three dead, the separatists have become increasingly aggressive. They have harassed western journalists turning up at checkpoints into the city.

On Monday they abducted three correspondents – two from Italy, one from Belarus – later releasing them. As well as Ostrovsky, at least two Ukrainian correspondents are being held.

Graham Phillips, a journalist, claimed on Twitter to have spoken several times about Ostrovsky's detention to Slavyansk's self-proclaimed "people's mayor", Vyacheslav Ponomarev. Phillips quoted Ponomarev Wednesday accusing Ostrovsky of disseminating propaganda. "@GrahamWP_UK: Mayor has just said that Simon is ok, is comfortable, but said that war rules in operation, accused Simon of propaganda."

In Washington, the state department spokeswoman Jen Psaki said that the US authorities were "deeply concerned" about Ostrovsky's detention, which, she said, violated the agreement between Russia and Ukraine reached last week.

"We condemn any such actions, and all recent hostage takings in eastern Ukraine, which directly violate commitments made in the Geneva joint statement," she said. "We call on Russia to use its influence with these groups to secure the immediate and safe release of all hostages in eastern Ukraine."

Ostrovsky had attended a recent press conference held by Ponomarev. Ostrovsky quoted him as saying that he would "personally kill" Ukraine's interior minister, Arsen Avakov, given the chance.

Ostrovsky's tweet of the quote read: "If [Avakov] comes here I'll personally put a bullet in his head … I won't shake hands with a faggot. Sloviansk's new pro-Russia mayor."

Ostrovsky also tweeted a photograph of Irma Krat, a journalist and Kiev activist kidnapped in Slavyansk and paraded before the cameras in what he called the "world's weirdest press conference".