Russian President Vladimir Putin has publicly addressed pro-Russian rebels for the first time, praising their "considerable success" inside Ukraine.
In what could be seen as a veiled declaration of victory, Mr Putin called the separatists the "army of Novorossia" - the historic name for the Russian Empire and one rebels give to their self-proclaimed state.
Speaking directly to the rebels in a late-night address on Thursday, the Russian leader called on them to provide a humanitarian corridor in east Ukraine for encircled Ukrainian government troops to leave the battlefield.
He said the corridor would prevent "pointless victims, to allow them leave the fighting area without impediment, join their families..., to provide urgent medical aid to those wounded as a result of the military operation," he said in a statement.
Mr Putin also said Russia will continue to provide humanitarian aid to civilians in east Ukraine, less than a week after Russia's first aid convoy delivered supplies to east Ukraine and then returned to Russia.
Ukraine and the West said Thursday that Russian troops were actively involved in the fighting tearing apart the east of the country, raising fears of a direct military confrontation between Kiev and its former Soviet master.
President Barack Obama led a chorus of international condemnation over the escalating crisis, saying it was "plain for the world to see" that Russian forces were fighting in Ukraine.
Mr Obama and German Chancellor Angela Merkel warned that Russia's actions "cannot remain without consequences" as the US and Europe raised the prospect of fresh sanctions against Moscow.
"Russia has deliberately and repeatedly violated the sovereignty and territorial integrity of Ukraine, and the new images of Russian forces inside Ukraine make that plain for the world to see," Mr Obama said.
"This ongoing Russian incursion into Ukraine will only bring more costs and consequences for Russia."
The United States and the European Union have already imposed a series of punishing sanctions on Russia over the crisis, the worst standoff between Moscow and the West since the Cold War.
Mrs Merkel said European leaders would discuss possible new measures against Moscow at a summit in Brussels on Saturday.
At an emergency meeting of the UN Security Council in New York, US envoy Samantha Power demanded that Russia "stop lying" over the conflict.
"Russia has to stop lying and has to stop fuelling this conflict," Mrs Power said.
"The mask is coming off. We see Russia's actions for what they are: a deliberate effort to support and now fight alongside illegal separatists in another sovereign country."
Ukrainian President Petro Poroshenko described the situation as "extremely difficult" but "manageable for us not to panic", as security chiefs announced that mandatory army conscription would resume in the autumn.
Nato said at least 1,000 Russian troops were on the ground supporting pro-Kremlin separatists who have been fighting against Kiev's rule since April.
A senior Ukrainian diplomat earlier decried the move as a "direct invasion" but Moscow again insisted none of its soldiers were on Ukrainian soi
