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Ukraine launched what appeared to be its first major assault against pro-Russian forces who have seized government buildings in the country's east, with fighting breaking out Friday in a city that has become the focus of the insurgency. Three deaths were reported in early fighting.

Russian President Vladimir Putin's spokesman said the offensive "effectively destroyed the last hope for the implementation of the Geneva agreements" which were intended to defuse the crisis.

Two Ukrainian helicopters were shot down and their pilots killed, both sides said. The Ukrainian Security Service said one of the helicopters was shot down with a surface-to-air missile, which it said undercut Russia's claims that the city is under control of civilians who took up arms.

Stella Khorosheva, a spokeswoman for the pro-Russian militants, said one of their men was killed and another injured. She offered no further details.

Peskov said the Kremlin had sent an envoy to Ukraine's southeast to negotiate the release of foreign military observers who were captured by pro-Russian militia in Slovyansk.

In comments to Russian news agencies, Peskov did not specify where Vladimir Lukin was sent to but said the Kremlin has not been able to get in touch with him since Ukraine launched the offensive.

The action came a day after Putin said that Ukraine should withdraw its military from the eastern and southern regions of the country. Russia has massed tens of thousands of troops along the Ukrainian border as it warns Ukraine's military not to move against the insurgents in the east.

The Ukrainian Security Service said its forces were fighting "highly skilled foreign military men" in Slovyansk.

The Security Service said one helicopter was shot down with a surface-to-air missile, a sophisticated weapon, which they said countered Russia's claims that the city is under control of civilians who took up arms.

The Ukrainian interior minister, Arsen Avakov, said on his official Facebook page that government troops met fierce resistance, but had managed to take control of nine checkpoints on roads around Slovyansk.

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Ukraine Forces Seek To Retake Slovyansk

Ukraine launched what appeared to be its first major assault against pro-Russian forces who have seized government buildings in the country's east, with fighting breaking out Friday around a city that has become the focus of the insurgency. Three deaths were reported in early fighting.

Russian President Vladimir Putin's spokesman said the offensive "effectively destroyed the last hope for the implementation of the Geneva agreements" which were intended to defuse the crisis.

Two Ukrainian helicopters were shot down and their pilots killed, both sides said. The Ukrainian Security Service said one of the helicopters was shot down with a surface-to-air missile, which it said undercut Russia's claims that the city is under control of civilians who took up arms.

Stella Khorosheva, a spokeswoman for the pro-Russian militants, said one of their men was killed and another injured. She offered no further details.

Putin's spokesman, Dmitry Peskov, said the Kremlin had sent an envoy to Ukraine's southeast to negotiate the release of foreign military observers who were captured by pro-Russian militia in Slovyansk.

In comments to Russian news agencies, Peskov said the Kremlin has not been able to get in touch with the envoy, Vladimir Lukin, since Ukraine launched the offensive. However, Russia's Interfax and RIA Novosti quoted Lukin's aides as saying he was in touch and safe.

The action came a day after Putin said that Ukraine should withdraw its military from the eastern and southern regions of the country. Russia has massed tens of thousands of troops along the Ukrainian border as it warns Ukraine's military not to move against the insurgents in the east.

The Ukrainian Security Service said its forces were fighting "highly skilled foreign military men" in Slovyansk.

The Security Service said one helicopter was shot down with a surface-to-air missile, a sophisticated weapon, which they said countered Russia's claims that the city is under control of civilians who took up arms.

Ukraine's acting president, Oleksandr Turchynov, said this week that some troops were "either helping or cooperating with terrorist organizations."

Excerpt from:
Ukraine Forces Seek to Retake Slovyansk, 3 Killed

US oil companies investing in Ukraine

Yuriy Boyko was Ukraine Energy Minister under ousted president Viktor Yanukovich, and now he's running for president. More importantly, though, he is still facilitating talks between the governments of Russia and Ukraine as well as high level executives of big U.S. and Western oil companies. He told CNBC's Dina Gusovsky that American companies have already shelled out or plan to invest a huge amount of money in Ukraine's oil and gas sector.

Mr Putin said Ukraine's government should defuse the political crisis by withdrawing its troops from southeastern regions and launching a broad constitutional reform process. He was quoted by the Kremlin as telling Ms Merkel that those steps were "the most important thing now" to resolve the crisis.

Ukraine's interim authorities introduced conscription on Thursday in the wake of launching an operation against the rebels last week, which has made little apparent progress.

Speaking in Kiev, Mr Yatseniuk said: "It's clear to me, President Putin has no limits. Putin's idea is to restore the might of the former Soviet Union and become emperor of a new-style Soviet empire." The West, he added, "got this message too late though after the Crimea invasion."

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He described the risk of broader Russian military intervention as high and described Ukraine's central government as falling into "a trap".

"On the one hand, the majority of Ukrainians are pressing on the acting president and security service to conduct the anti-terrorist operation and to bring these terrorists to justice. On the other hand, if you start this kind of very tough operation, you will definitely have civilian casualties. And this is the perfect excuse for President Putin to say look, these ultranationalists kill Russian-speaking people. We need to protect them," he said.

"The intel we got is very clear," he said. "Russia is entirely ready to cross the border as they did in Crimea."

Mr Yatseniuk insisted Kiev had not yet lost all authority over the Donetsk and Lugansk regions, but said pro-Russians had taken control of "up to 10" cities. He said the central government still intended to hold a presidential election on May 25, and held out the prospect of a referendum on greater regional autonomy and Russian language rights.

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