Ukraine's Interior Minister Arsen Avakov says three pro-Russian activists have been killed and 13 injured while attempting to raid a military base in the Black Sea port of Mariopol overnight on Wednesday.
In a posting on his Facebook page, Mr Avakov said 63 others were arrested and none of the interior ministry troops had been killed. It is the heaviest casualty toll in any single incident so far in eastern Ukraine.
Tensions escalated in March when Russia annexed Crimea, causing international outrage. Unrest later spread to Donetsk region, another mainly Russian-speaking area. It is Europe's worst crisis since the Cold War.
About 300 pro-Russian separatists attacked the military unit near the Azov Sea, throwing petrol bombs on Wednesday. Troops opened fire, killing three, Mr Avakov said. The operation is continuing - Ukraine has sent in reinforcements including helicopters.
Meanwhile, pro-Russian groups have consolidated their control of government buildings in several other cities in eastern Ukraine.
The government in Kiev said six Ukrainian armoured personnel carriers have been seized in the town of Kramatorsk, a day after the army began an operation to recapture areas controlled by anti-government protesters. In the city of Donestsk, masked gunmen have taken over the mayor's building.
The men are well-armed and have said they intend to remain there until the Ukrainian government agrees to hold a referendum on autonomy or independence for eastern regions, the BBC reports.
Talks in Geneva
High-level talks are scheduled in Geneva on Thursday involving Russia, Ukraine, the European Union and the United States, aimed at easing the crisis in Ukraine. The West says Russia is aiding the pro-Russian activists occupying buildings.
In a live television phone-in on Thursday, Russia's President Vladimir Putin warned Kiev of "the abyss they're heading into" in eastern Ukraine and urged dialogue. He said the Kiev government, which had "seized power", had only spoken to its own appointees in the region, but "not to the people whom locals trust".
Mr Putin is now taking questions from residents of Sevastopol, base of the Russian fleet in Crimea, the first place to feature in his phone-in. It is the first time Crimea has been included in Mr Putin's annual phone-in.
NATO increases military presence
NATO is reinforcing its military presence along its eastern borders in response to what it calls Russia's aggressive behaviour in Ukraine.
The organisation's secretary-general, Anders Fogh Rasmussen, says the move is about deterrence and de-escalation.
However in response to NATO's actions, the Russian ambassador to the European Union, Vladimir Chizhov has said it will do nothing to defuse tensions in the region.