KRAMATORSK/SLAVIANSK, Ukraine - Separatists flew the Russian flag on armoured vehicles taken from the Ukrainian army on Wednesday, humiliating a Kiev government operation to recapture eastern towns controlled by pro-Moscow partisans.
Six armoured personnel carriers were driven into the rebel-held town of Slaviansk to waves and shouts of "Russia! Russia!" It was not immediately clear whether they had been captured by rebels or handed over to them by Ukrainian deserters.
Another 15 armoured troop carriers full of Ukrainian paratroops were surrounded and halted by a pro-Russian crowd at a town near an air base. They were allowed to retreat only after the soldiers handed the firing pins from their rifles to a rebel commander.
The military setback leaves Kiev looking weak on the eve of a peace conference on Thursday, when its foreign minister will meet his Russian, US and European counterparts in Geneva. The meeting comes as the European Union and the United States contemplate more sanctions against Russia, with new measures from Washington possibly coming as soon as Friday.
Upon arriving in Geneva on Wednesday, Ukrainian Foreign Minister Andrii Deshchytsia said there is still time to ease tensions in Ukraine. "I think that we still have a chance to de-escalate the situation using the diplomatic means," he said. "And we will try hard. We are trying hard - not only Ukraine - but also the United States. However, the time is now, not only to express the concerns, but to look for a more concrete and adequate response to Russia's plans and actions."
So far, the United States and European Union have imposed only targeted sanctions against a list of Russian and Ukrainian individuals and companies in retaliation for Moscow's seizure and rapid annexation of Crimea from Ukraine, completed last month.
The EU took a step towards imposing harsher sanctions on Wednesday by informing its member states of the likely impact the proposed measures would have on each of them. Countries have a week to respond before the European Commission starts drawing up plans.
As Secretary of State John Kerry flew into Geneva, a senior US official said that President Barack Obama had put the onus on Moscow to calm the crisis. "With regard to sanctions, the president has been very clear that if Russia does not take this opportunity to de-escalate, the costs are going to go up," the official told reporters.
US officials, speaking on the condition of anonymity, said the United States also was prepared to offer Ukraine more non-lethal assistance.
Moscow responded to the overthrow of its ally Ukrainian president Viktor Yanukovich in February by announcing its right to intervene militarily to protect Russian speakers across the former Soviet Union, a new doctrine that has overturned decades of post-Cold War diplomacy.