Sky NewsSeparatists in Slavyansk said they were fighting back against a “large-scale operation” to retake the city by Ukrainian forces.
A Reuters photographer said he had seen a military helicopter open fire on the outskirts of the town and separatists said two aircraft had been shot down.
Ukrainian Interior Minister Arsen Avakov confirmed a pilot had been killed.
Posting on Facebook, he wrote: “Against Ukraine’s special forces, terrorists used heavy artillery, including grenade launchers and portable anti-aircraft missile launchers.
“One pilot is dead and there are wounded.”
Mr Avakov said Ukrainian troops had fought pro-Russian forces and managed to take control of nine checkpoints on roads around Slavyansk.
The action in Slavyansk, if confirmed, would mark the first significant military response by Kiev.
Vyacheslav Ponomarev, the insurgency-appointed mayor of Slavyansk, claimed self-defence forces had shot down two helicopters and taken one pilot hostage.
A spokesman for the separatists said there had been fighting in several areas around the city, with government armoured vehicles spotted on roads around Slavyansk.
An cameraman for the AP news agency reported seeing black plumes of smoke on the edge of the city and said an emergency siren had sounded at dawn.
The apparent move to retake the city came only hours after Russia staged a huge May Day parade on Moscow’s Red Square on Thursday.
It is the first since the Soviet era – with workers holding banners proclaiming support for President Vladimir Putin after the seizure of territory from neighbouring Ukraine.
Ukrainian officials have been criticised for being slow to act to stop the rebels seizing swathes of its Donbass coal and steel belt.
They launched an “anti-terrorist” operation in early April but have resisted large-scale measures so far.
Armed groups seeking union with Russia have seized a number of government buildings in towns in eastern Ukraine.
Russia’s President Putin yesterday called on Ukraine to remove its forces from the east and south of the country.
But hours later Ukraine’s acting president, Oleksandr Turchynov, ordered that military conscription of men aged 18-25 be restarted because of “threats of encroachment on the nation’s territorial integrity”.
http://news.sky.com/story/1253586/ukraine-in-military-assault-on-slavyansk