DONETSK, Ukraine - The insurgency dividing Ukraine worsened on Thursday when militants hurling petrol bombs seized a key building in the eastern city of Donetsk as mass pro-Russia rallies were held there and in annexed Crimea.Kiev’s Western-backed government has already admitted its security forces are “helpless” to halt the rebellion it blames on Moscow from spreading across more than a dozen eastern towns and cities.It has ordered out a Russian diplomat arrested for espionage, risking a tit-for-tat response from Russia.As fears mounted of the ex-Soviet republic disintegrating, Germany stepped up its appeal to Russian President Vladimir Putin to help free seven OSCE inspectors held in the town of Slavyansk by the rebels - four Germans, a Pole, a Dane and a Czech.In Donetsk, a mob of around 300 pro-Russian militants throwing Molotov cocktails and bricks stormed the prosecutor’s office, beating up outnumbered riot police and stealing their arms and shields while yelling “fascists!”Once inside, they smashed doors and carried off official photos and Ukrainian national symbols to be burned. The insurgents already held the regional administration building and the city hall in Donetsk.The assault occurred while 10,000 people in the city marched in opposition to the Kiev government and in favour of closer ties to Russia. The rally evolved from a traditional International Labour Day march. In Moscow, the same event turned into a sort of victory parade for Putin and his policies in Ukraine, with 100,000 workers filling Red Square for the first time since the 1991 break-up of the Soviet Union, waving patriotic slogans and praising the president.By contrast, the Labour Day march in Kiev was dispirited and meagre, attended by a mere 2,000 people.“Why do others quietly steal our land? Why does Russia do it, as well as the Ukrainian oligarchs? I am not against Russia, I don’t care about what authority will be here, but they should give us a normal life,” said one participant, a 51-year-old unemployed woman who gave her name as Zhanna.In Crimea, the Ukrainian peninsula Russia annexed in March, some 60,000 people marched in the main city of Simferopol to hail Putin bringing them under Moscow’s governance, an AFP journalist saw. Putin and his prime minister, Dmitry Medvedev, are reportedly to make a triumphant visit to the territory late next week. In the eastern Ukrainian town of Slavyansk, near Donetsk, a near week-long stalemate over the fate of seven detained European military inspectors with the Organisation for Security and Cooperation in Europe dragged on. Four OSCE negotiators were seen arriving late Thursday.Rebels in the town have been saying for three days that the team, grabbed last week, were about to be freed after negotiations involving a prisoner swap.But so far the militants claim only to have exchanged two of three Ukrainian commandos captured separately for some of their colleagues taken prisoner by Kiev, according to the Interfax news agency. There was no immediate confirmation from Ukrainian authorities, and the condition of all three of the commandos was unknown.The last time they were seen, on Russian state television, they were savagely beaten, cuffed to chairs with their bloodied eyes bound by tape, and stripped to their underwear.In a phone call to Putin, German Chancellor Angela Merkel asked for help to have the OSCE team released.“The chancellor reminded President Putin of Russia’s responsibilities as an OSCE member and called on him to use his influence,” Merkel’s spokesman said.The Kremlin said both leaders emphasised the “mediating potential of the OSCE” in calming the crisis in Ukraine.Putin reiterated his call for Kiev to end its military operation trying to halt the pro-Russian rebels grabbing more towns in the east.The West believes Putin is pulling the strings in the insurgency, dismissing his denials that Russian forces are covertly leading rebel assaults.This week, the US, the EU, Japan and Canada imposed sanctions on powerful Russian individuals and firms as punishment for what is seen as Moscow’s continuing interference.Russia has reacted angrily, but said it would not retaliate unless the pressure was upped further.Moscow “will not rush to do anything stupid,” Russian Foreign Minister Sergei Lavrov said on a trip to Latin America.The International Monetary Fund has meanwhile thrown a $17-billion lifeline to Ukraine, with $3.2 billion of that available immediately.The money could be used to pay a $3.5-billion Russian gas debt that Putin has warned could lead to him turning off the taps in a move also affecting several European countries.Talks were due to take place Friday in Warsaw between the European Union, Russia and Kiev over the gas dispute.While Kiev may have staved off bankruptcy, it has found itself unable to roll back the rebels in the east.On Wednesday, acting president Oleksandr Turchynov said the country’s military was on “full combat alert” against a possible invasion by tens of thousands of Russian troops camped on the border. He also ordered a pre-dawn military drill in Kiev that produced just 10 armoured vehicles and several armed soldiers.But there was no sign of increased military activity in the east, where the main operational focus was manning a roadblock perimeter around Slavyansk. The interior ministry said that between 30 and 50 of its law enforcement officers were being held in the town.Russia’s foreign ministry said any effort by Kiev to intensify its military operation “against its own people” in the east could have “catastrophic consequences”.The pro-Russia rebels have vowed to hold a “referendum” on independence on May 11 - two weeks before a nationwide presidential vote is due to take place on May 25. The unrest in Ukraine, which started with peaceful demonstrations in Kiev against former president Viktor Yanukovych, has rapidly spiralled into one of the worst geopolitical crises in years.After a deadly crackdown on protesters, Yanukovych was forced out, sparking fury in Moscow which led to the Kremlin’s blitz annexation of Crimea.