SLAVIANSK, Ukraine - Pro-Russian rebels shot down two Ukrainian helicopters on Friday, killing two crew members, while Moscow accused Kiev of wrecking hopes of peace by launching a ‘criminal’ assault to retake the separatist-held town of Slaviansk.
In the southern port of Odessa, one man was shot dead in clashes between supporters of Ukrainian unity and pro-Russian activists, police said. Protesters threw petrol bombs, paving stones and explosive devices during the disturbances. Though Ukrainian forces embarked on one of their most concerted military operations yet, their advance on the ground in the east was limited. Nevertheless, President Vladimir Putin’s spokesman accused Kiev of firing on civilians from the air in a ‘punitive operation’ that destroyed an international peace plan.
Russia was ‘extremely worried’ about the fate of Russians in the eastern Ukrainian town, including an envoy sent to help free German and other foreign hostages, the Kremlin spokesman said. The dramatic language seemed to raise the stakes, as Moscow has tens of thousands of troops massed on the border and claims the right to invade if needed to protect Russian speakers.
One person died from gunshot wounds in the southern Ukrainian port city of Odessa on Friday during clashes between pro-Russian militants and hundreds of people holding a rally for national unity, officials said.
‘During the confrontation, stones, Molotov cocktails and explosive devices were used... one man was shot in his right lung. The victim died before the ambulance could reach him,’ the interior ministry said in a statement.
Ukraine’s acting president said Russian ‘armed saboteurs’ had tried to cross into the country overnight, but were pushed back by Ukrainian border troops. He gave no further details. His Western-backed government rejected Russia’s interpretation of events, saying Moscow was supporting groups in eastern Ukraine who were ‘putting civilians in danger, seizing hostages and creating an atmosphere of terror and violence’.
Reuters journalists in Slaviansk, the most heavily fortified bastion of pro-Russian separatists in eastern Ukraine , heard shooting break out and saw one helicopter opening fire before dawn. Ten hours later, the city was largely quiet, with shops shut and armed separatists in control of the streets. Advancing Ukrainian forces in armoured vehicles took up positions closer in to the suburbs, but rebels still controlled most of the town of 130,000. Acting President Oleksander Turchinov said the operation had been complicated by the rebels’ use of human shields and had not progressed as quickly as had been hoped.
The United States and Germany delivered a firm warning to Russia on Friday that it would face direct and painful economic sanctions if the elections in Ukraine later this month are disrupted. US President Barack Obama and German Chancellor Angela Merkel delivered the statement after talks at the White House appeared to bring the prospect of ‘sectoral’ economic sanctions closer than ever before. The joint declaration effectively amounted to a new standard for the imposition of ‘sectoral’ sanctions on Russia's economy. Previously the administration has said such measures would only come into force for a provocation on the order of Russia invading Ukraine . ‘If in fact, we see the disruptions and the destabilization continuing so severely that it impedes elections on May 25, we will not have a choice but to move forward with additional... severe sanctions,’ Obama said. ‘If Russia continues on its current course, we have a range of tools at our disposal, including sanctions that would target certain sectors of the Russian economy,’ Obama said.
Such measures, already being worked on by experts in the United States and Europe would likely target economic activity including in the financial, energy and mining sectors which are vital to the Russian economy. Merkel, facing severe political pressure from German business groups wary that new sanctions could damage their close ties with Russian industry, also warned Russian President Vladimir Putin .
 that May 25 was ‘a very crucial date.’ ‘The 25th of May is not all that far away.
Should that not be possible to stabilize the situation further, sanctions will be unavoidable,’ Merkel said. ‘It's very much up to the Russians which road we will embark on, but we are firmly resolved to continue to travel down that road.’
Even though both sides now agree that sectoral sanctions may be necessary, the definition and exact targeting of those measures will be crucial and could be broad. Europe's measures will be closely watched from the United States to see if they appease influential business interests at the expense of effectiveness. The talks at the White House took place as fresh instability and violence rocked eastern Ukraine and Moscow warned that Kiev must halt an operation against pro-Kremlin groups.

The separatist pro-Russian militants had made more moves on Thursday, seizing a rail control centre for the Donetsk region, a railway official said. By cutting off power, they had all but paralysed train traffic. Kiev said the firing of missiles that brought down its helicopters was evidence that Russian forces were present in the town. Moscow denies that its troops are on the ground. Nonetheless, Kremlin accounts of grave threats to civilians highlight the risk of a Russian move to seize territory ahead of a vote the rebels aim to hold on May 11 seeking a mandate to break with Kiev, like one held in the Crimea region before Moscow annexed it in March.
For Russians, the Kremlin’s rhetoric of ‘fascists’ in Kiev launching a ‘punitive operation’ evokes the depredations of Nazi German invaders in World War Two, being given extensive state media coverage as next week’s anniversary of the Soviet victory is used to foster national pride and nostalgia. On the square outside city hall in Slaviansk, about 100 people gathered on Friday and said they were appealing to Putin to send troops to help them. Businesswoman Tamara Voshchanaya said: ‘What can you think when the sound of cannon makes you jump out of bed, when helicopters are flying over and shooting at our guys? On the town’s southern outskirts, eight Ukrainian armoured personnel carriers cut off the road but faced a cordon two deep of local residents shouting at them to go home.
Some rebels threw up new barricades of felled trees. Putin’s popularity has soared with the seizure of Crimea and talk of restoring Moscow’s former empire. This week he restored the Soviet-era tradition of holding a May Day parade on Red Square, where marchers carried banners hailing the acquisition of Ukrainian territory.
US Defense Secretary Chuck Hagel said NATO’s European members needed to increase their defense spending in light of Russia’s action in Ukraine .
The European Union said it was watching events in eastern Ukraine with growing concern. But Kiev is not a member of NATO and Western leaders have made clear they will not fight to defend Ukraine . The Ukrainian Defence Ministry said two Mi-24 attack helicopters had been shot down by shoulder-launched anti-aircraft missiles while on patrol overnight around Slaviansk. Two airmen were killed and others wounded.
Other Ukrainian officials and the separatist leader in Slaviansk said earlier that one airman was taken prisoner. A third helicopter, an Mi-8 transport aircraft, was also hit and a serviceman wounded, the Defence Ministry said. The SBU security service said this helicopter was carrying medics. Ukrainian officials said their troops overran rebel checkpoints and Slaviansk was now ‘tightly encircled’. Putin’s spokesman heaped blame on the Ukrainian government, which took power two months ago after pro-Western protests forced the Kremlin-backed elected president to flee to Russia.
Noting that Putin had warned before that any ‘punitive operation’ would be a ‘criminal act’, Dmitry Peskov told Russian news agencies that this was what had now happened at Slaviansk Peskov said Moscow had not heard from an envoy, Vladimir Lukin, sent to southeast Ukraine to negotiate the release of European military observers held by the rebels , but RIA Novosti news agency said later his aide had confirmed he was fine. ‘While Russia is making efforts to de-escalate and settle the conflict, the Kiev regime has turned to firing on civilian towns with military aircraft and has begun a punitive operation, effectively destroying the last hope of survival for the Geneva accord,’ he said, referring to a deal on April 17 signed by Russia, Ukraine , the United States and the European Union.
Under that agreement, separatists were supposed to lay down their arms and vacate the public buildings they have seized in about a dozen towns they have seized across the Russian-speaking east. Since then, however, they have tightened their grip. Ukraine’s Interior Ministry said it persuaded separatists to leave two buildings in the city of Luhansk on Friday.
The SBU said the deadly use by the separatists of shoulder-launched anti-aircraft missiles was evidence that ‘trained, highly qualified foreign military specialists’ were operating in the area ‘and not local civilians, as the Russian government says, armed only with guns taken from hunting stores’. On his Facebook page, Interior Minister Arsen Avakov posted: ‘The goal of our anti-terrorist operation and, at the same time, our demands to the terrorists are simple:
‘Free the hostages, lay down weapons, vacate administrative buildings and get municipal infrastructure back to normal.’ The rebels said they had the upper hand. ‘They wanted to carry out some small-scale tactical operations just to scare the people,’ said a militant manning a checkpoint leading to the army-held airfield. ‘But so far things have not worked out the way they wanted.’