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Starobesheve - Rebels in east Ukraine appear to have seized swathes of territory from retreating government forces, while Western intelligence says Russian army units are operating inside the country.
After weeks of government offensives that have seen troops push deep into the last rebel bastions, the tide appeared to be turning once again in the four-month conflict, prompting a nervous government in Kiev to call on Nato for help.
AFP journalists saw no signs of government troops south of the rebel-held city of Donetsk, with road blocks on the entire 100km stretch to the Azov Sea manned by pro-Russian rebels.
A volunteer commander posted on Facebook that government forces were surrounded in the key transport hub of Ilovaysk and reinforcements were desperately needed.
Evidence of the deteriorating situation emerged just hours after the first meeting in three months between Ukrainian President Petro Poroshenko and his Russian counterpart Vladimir Putin, which failed to achieve any concrete breakthrough.
Russian army units
There is increasing concern in Kiev and the West that Russia is intervening directly in the conflict - a charge that Moscow has repeatedly denied.
Ukraine's government claimed on Wednesday that a battalion of Russian soldiers had set up a military headquarters near the village of Pobeda, around 50km southeast of Donetsk.
Meanwhile, Poland's Prime Minister Donald Tusk said Nato and Polish intelligence have evidence of regular Russian army units operating in Ukraine.
A Nato diplomat also told AFP on condition of anonymity that a new Russian anti-aircraft missile system had been detected in a rebel-held area.
The SA-22 air defence system, which has a range of up to 20 kilometres, was "now in the zone", said the official, adding that Russian support for the rebels had become "more open" recently.
Russian Foreign Minister Sergei Lavrov said the Kremlin was "not interested in breaking up" Ukraine, but said Russia will send more aid convoys to Ukraine "in the nearest future", despite complaints from Kiev they breach its sovereignty.
Government troops surrounded
In the town of Starobesheve, about 30km southeast of Donetsk, there were signs of a hasty departure by Ukraine's army.
A Ukrainian tank sat parked on the roadside as villagers poked around cases of abandoned ammunition, while rebels held all checkpoints in the town.
Locals told AFP the troops left on Monday after shelling from the direction of the Russian border about 30km away.
Ukraine's military conceded that "militants together with Russian occupants" had taken control of Starobesheve, as well as a string of villages near Novoazovsk, a town on the Azov Sea where clashes had been raging for days.
Meanwhile, Commander Semen Semenchenko, head of the "Donbass battalion" which was the first fully volunteer contingent to fight in the east, posted angry Facebook messages denouncing the government's failure to help forces in the transport hub of Ilovaysk.
He said the troops were surrounded by rebels, running out of ammunition and unable to evacuate the injured, and that two regiments of Russian airborne troops were "digging in" with tanks surrounding the town, 10 kilometres east of Donetsk.
Kiev said on Wednesday that 13 soldiers had died in the past 24 hours. AFP reporters saw the charred remains of three civilians whose car was hit by a shell in Donetsk, adding to another three civilians reported killed earlier in the day.
A UN rights report said fighting over the past month had sent the death toll soaring, with at least 36 people killed every day.
More than 2 200 people have lost their lives since the conflict began in April, according to the UN.
Call for Nato aid
Ukraine's Prime Minister Arseniy Yatsenyuk said it was time for Nato to act when the alliance holds a summit in Wales next week.
"We expect our Western partners and the alliance to provide practical help and take crucial decisions at the summit in September," he said.
Russia vehemently opposes closer ties between Ukraine and Nato. Concerns that Kiev could be drawn closer into the Western security alliance are seen as the main motivation behind Russia's actions in recent months.
Nato chief Anders Fogh Rasmussen said in an interview published on Wednesday that the alliance was preparing a rapid response unit to deploy troops swiftly in eastern Europe.
Poroshenko and Putin held marathon talks in Belarus's capital Minsk on Tuesday alongside top EU officials to try to find ways to end the conflict.
The Ukrainian president said all sides had "without exception" agreed to his peace plan, and that he and Putin had discussed the "necessity of closing Ukraine's borders" to prevent the movement of "equipment, mercenaries, and ammunition".
Putin again insisted Russia had no role in the fighting, saying: "We cannot discuss any ceasefire conditions. It's not our business."
He played down reports that 10 Russian paratroopers had been captured inside Ukrainian territory, backing his military's claims that they had strayed across the border by accident.
But opposition media in Russia reported on hushed-up funerals for two elite unit paratroopers, suggesting they had been killed in action in Ukraine.
Novaya Gazeta quoted a relative of one of the paratroopers, Leonid Kichatkin, as saying the family was told he was killed outside the rebel-held city of Lugansk.
