BBC NEWS
European Union foreign ministers have expressed "deep concern" at Russia's "aggression against Ukraine", as the bloc's leaders prepare to consider new sanctions on the Russian government.
Speaking after the ministerial meeting in Milan, EU foreign policy chief Catherine Aston urged Russia to "withdraw its forces from Ukraine".
EU leaders meet in Brussels later to consider their response to the crisis.
Russia denies that its forces are backing rebels in eastern Ukraine.
But Baroness Ashton said there was "deep concern" over "direct aggression by Russian forces". She called on Russia to stop the flow of arms, equipment and personnel into Ukraine.
In Brussels, European Commission President Jose Manuel Barroso warned Russia that the EU was ready to "stand by its principles" and called for a political solution before the crisis reached a "point of no return".
He was speaking after talks with Ukrainian President Petro Poroshenko, who is due to attend the EU leaders' summit later on Saturday.
Mr Poroshenko said Ukraine was a victim of "military aggression and terror" involving "thousands of foreign troops and hundreds of foreign tanks".
Government forces have lost ground in recent fighting.
A Ukrainian military spokesman said on Saturday that Russian tanks had attacked the town of Novosvitlivka near Luhansk and "destroyed virtually every house".
Spokesman Andriy Lysenko said troops had been ordered to retreat from Novosvitlivka.
Troops are also reportedly trying to evacuate Ilovaisk in the Donetsk region. It has been surrounded by rebels.
Some 2,600 people have died in fighting in the Donetsk and Luhansk regions since April.
The conflict erupted following Russia's annexation of Ukraine's southern Crimea peninsula a month before.
Cars queue to leave Mariupol, from where Yuri Vendik reports
In south-eastern Ukraine, people have been leaving the port city of Mariupol, after advancing rebels captured Novoazovsk to the east.
Western and Ukrainian officials say that this offensive has been substantially helped by Russian regular troops, opening a new front. Russia denies the accusation.
On Friday, Nato released satellite images it said showed columns of Russian armed forces inside Ukrainian territory.
'New decisions'
On Saturday, French President Francois Hollande said the Ukraine crisis was the biggest since the end of the Cold War.
"Sanctions will no doubt be increased," Mr Hollande said in Paris before travelling to Brussels.
"Europe has to act. It already has. But in the face of this escalation in tension, there are new decisions to be taken," he said.
The EU and the US have already imposed sanctions against dozens of senior Russian officials, separatist commanders and Russian firms accused of undermining Ukrainian sovereignty.
In late July, the EU also targeted some key economic sectors, prompting Russia to retaliate by banning food imports.
War in eastern Ukraine: The human cost- At least 2,593 people killed since mid-April (not including 298 passengers and crew of Malaysian Airlines MH17, shot down in the area) - UN report on 7 August
- 951 civilians killed in Donetsk region alone, official regional authorities said - 20 August
- In some particularly dangerous places, such as Luhansk region, victims are said to have been buried informally, making accurate counts difficult
- Rebels (and some military sources) accuse the government of concealing true numbers
- 155,800 people have fled elsewhere in Ukraine while at least 188,000 have gone to Russia
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