Ukraine accused Russia on Thursday, Aug 28, of bringing troops into the southeast of the country in support of pro-Moscow fighters, Reuters reported.

Ukraine's security and defense council said the border town of Novoazovsk and other parts of Ukraine's south-east had fallen under the control of Russian forces who together with militias were staging a counter-offensive.

"A counter-offensive by Russian troops and separatist units is continuing in south-east Ukraine," the council said in a post on Twitter.

President Petro Poroshenko, in a statement explaining his decision to cancel a visit to Turkey, said: "Russian troops have actually been brought into Ukraine."

Russia denies intervening in Ukraine by arming the insurgents or sending soldiers across the border.

“The Russian authorities clearly said many times there are no regular Russian troops there. Russia is not taking part in this armed conflict,” said a Russian diplomatic source.

The latest escalation in the five-month crisis came only two days after the presidents of the two countries held their first talks in more than two months and agreed to work towards launching a peace process.

Ukrainian Prime Minister Arseny Yatseniuk appealed to the United States, European Union and G7 countries "to freeze Russian assets and finances until Russia withdraws armed forces, equipment and agents".

Anton Gerashchenko, an adviser to Ukrainian Interior Minister Arsen Avakov, said on Facebook: "The invasion of Putin’s regular Russian army of Ukraine is now an established fact!"

French President Francois Hollande said it would be "intolerable and unacceptable" if it was proved true that Russian troops had entered Ukrainian territory.