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European Commission President Jose Manuel Barroso: "We may see a situation where we reach the point of no return"
European Union foreign ministers have expressed "deep concern" at Russia's "aggression against Ukraine", as the bloc's leaders prepare to consider new sanctions on the Moscow government.
Speaking after the ministerial meeting in Milan, EU foreign policy chief Catherine Aston urged Russia to "withdraw its forces from Ukraine".
EU leaders meet in Brussels later to consider their response to the crisis.
Russia denies that its forces are backing rebels in eastern Ukraine.
But Baroness Ashton said there was "deep concern" over "direct aggression by Russian forces". She called on Russia to stop the flow of arms, equipment and personnel into Ukraine.
In Brussels European Commission President Jose Manuel Barroso warned Russia that the EU was ready to "stand by its principles" and called for a political solution before the crisis reached a "point of no return".
He was speaking after talks with Ukrainian President Petro Poroshenko, who is due to attend the EU leaders' summit later on Saturday.
Mr Poroshenko said Ukraine was a victim of "military aggression and terror" involving "thousands of foreign troops and hundreds of foreign tanks".
Government forces have suffered have lost ground in recent fighting.
A Ukrainian military spokesman said on Saturday that Russian tanks had attacked the town of Novosvitlivka near Luhansk and "destroyed virtually every house".
A number of troops remain encircled by the rebels near the town of Ilovaisk in the Donetsk region.
Some 2,600 people have died in fighting in the Donetsk and Luhansk regions.
Further south, people have been leaving the southern port city of Mariupol, after advancing rebels captured the town of Novoazovsk to the east.
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Cars queue to leave Mariupol from where Yuri Vendik reports
Western and Ukrainian officials say that offensive has been substantially helped by Russian regular troops, opening a new front. Russia denies the accusation.
The conflict there erupted in April following Russia's annexation of Ukraine's southern Crimea peninsula a month before.
Satellite evidence?
On Friday, Nato released satellite images it said showed columns of Russian armed forces inside Ukrainian territory.
Also on Friday, German Foreign Minister Frank-Walter Steinmeier warned that the "already dangerous situation" in Ukraine had now entered "a whole new dimension".
Sweden's Carl Bildt said a clear message had to be sent to Russia: "We are in the midst of the second Russian invasion of Ukraine within a year," he added.
It remains unclear if a new round of sanctions will be adopted in Brussels.
The EU and the US have already imposed sanctions against dozens of senior Russian officials, separatist commanders and Russian firms accused of undermining Ukrainian sovereignty.
In late July, the EU also targeted some key economic sectors, prompting Russia to retaliate by banning food imports.
War in eastern Ukraine: The human cost- At least 2,593 people killed since mid-April (not including 298 passengers and crew of Malaysian Airlines MH17, shot down in the area) - UN report on 7 August
- 951 civilians killed in Donetsk region alone, official regional authorities said - 20 August
- In some particularly dangerous places, such as Luhansk region, victims are said to have been buried informally, making accurate counts difficult
- Rebels (and some military sources) accuse the government of concealing true numbers
- 155,800 people have fled elsewhere in Ukraine while at least 188,000 have gone to Russia.
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