Russia has massed around 20,000 combat-ready troops on Ukraine’s border and could use the pretext of a humanitarian mission to invade, Nato said yesterday, its starkest warning yet that Moscow could soon mount a ground assault against its neighbour.

President Vladimir Putin announced Moscow’s biggest economic response to western sanctions, launching a tit-for-tat trade war by ordering his government to restrict imports of food from countries that have imposed sanctions on Russia.

With fighting escalating and rebels losing ground in the weeks since a Malaysian airliner was shot down over separatist-held territory, Russia has announced military exercises this week in the border region.

“We’re not going to guess what’s on Russia’s mind, but we can see what Russia is doing on the ground – and that is of great concern. Russia has amassed around 20,000 combat-ready troops on Ukraine’s eastern border,” Nato spokeswoman Oana Lungescu said.

Moscow could use “the pretext of a humanitarian or peacekeeping mission as an excuse to send troops into Eastern Ukraine”, she said. A Nato military officer, speaking on condition of anonymity, said Russia’s build-up at the border included tanks, infantry, artillery, air defence systems, logistics troops, special forces, and various aircraft.

A Russian defence ministry spokesman dismissed Nato’s accusations: “We’ve been hearing this for three months already.”

Moscow annexed Ukraine’s Crimea peninsula in the Black Sea in March, and western countries say it has funded and armed pro-Russian rebels who rose up in the east of Ukraine in April.

Kiev said 18 Ukrainian servicemen had been killed and 54 injured in 25 clashes over the past day in eastern Ukraine. Military spokesman Andriy Lysenko said troops had been shelled from inside Russian territory and frontier guards had come under a four-hour mortar and artillery attack.

Fighting has intensified since Malaysia Airlines flight MH17 crashed on July 17th, killing all 298 people on board. Western countries say it was shot down by rebels with an advanced anti-aircraft missile supplied by Russia. Moscow denies blame, and the Russians who command the rebels deny they had such missiles.

Kiev’s military offensive has pushed the rebels out of many of their strongholds, leaving them besieged in the cities of Donetsk and Luhansk, which the rebels have proclaimed capitals of two “people’s republics”.

Residents in Donetsk said Ukrainian warplanes had carried out air strikes on Tuesday night. Reuters journalists heard the planes roar overhead and massive explosions during the night. In the morning, an industrial district 2-3km (1-2 miles) from the city centre was pocked with craters, including two huge holes seven metres wide and two metres deep, ripped into the asphalt.

“The planes were flying low. Then there were two massive explosions and the glass was blown out of the window. It was terrifying. This is war. There will never be peace,” said Nadezhda, a woman who lived nearby.

Government military spokesman Lysenko denied Ukrainian planes had carried out air strikes: “The Ukrainian military does not bomb the towns of Donetsk and Luhansk or any other similar populated places,” he said.

Many residents have fled the two cities, but hundreds of thousands of people are still living in them, increasingly fearful that they will bear the brunt of a full-blown assault. – (Reuters)