Separatists flew the Russian flag on armored vehicles taken from the Ukrainian Army on Wednesday, humiliating a Kiev government operation to recapture eastern towns controlled by pro-Moscow partisans.
The armored personnel carriers were driven into the rebel-held town of Slovyansk to waves and shouts of "Russia! Russia!" It was not immediately clear whether they had been captured by rebels or handed to them by Ukrainian deserters.
The military setback leaves Kiev looking impotent before a peace conference in Geneva on Thursday, when its foreign minister will meet his Russian counterpart for the first time since Moscow-backed President Viktor Yanukovych was toppled in February after deadly protests.
Moscow has responded to the overthrow of Yanukovych by declaring the Kiev government an illegitimate gang of fascists and announcing its right to intervene militarily across the former Soviet Union to protect Russian speakers, a new doctrine that has overturned decades of post-Cold War diplomacy.
The Ukrainian government confirmed that six of its armored vehicles were in the hands of separatists. Photos of their number markings showed they were among vehicles taken earlier in the government's attempted "anti-terrorist" operation to secure control of the town of Kramatorsk.
Kiev has sent paratroops to retake towns held by separatists who have declared an independent "People's Republic" in the industrial Donbass region.
The Ukrainian government and its Western allies believe Russia is behind the uprising, which follows Moscow's seizure and annexation of Ukraine's Crimea region last month. Moscow denies it is involved and says Kiev is precipitating civil war by sending troops to put down the revolt.
The Kiev government is seeking to reassert control without bloodshed, which it fears would precipitate a Russian invasion.
The operation is the first test of Kiev's underfunded army, which had until now played no role in six months of internal unrest. The government seems to have resorted to using troops after losing faith that police in the east would stay loyal.
Government troops began their operation on Tuesday, arriving by helicopter to take control of an airfield at Kramatorsk. They drove armored personnel carriers flying the Ukrainian flag into the town in the early morning.
But several of the same vehicles later rumbled into Slovyansk, 15 kilometers away, with Russian and separatist flags and armed men in motley combat fatigues on top. They stopped outside the separatist-occupied town hall.
Footage of one of the personnel carriers performing stunts in Slovyansk. (YouTube / Graham Phillips)
A soldier guarding one of the six troop carriers said he was a member of Ukraine's 25th paratrooper division, the unit sent by Kiev to recapture Slovyansk and Kramatorsk.
"All the soldiers and the officers are here. We are all boys who will not shoot our own people," he said, adding that his men had had no food for four days until local residents fed them.
However, a spokesman for the separatists and a witness in Kramatorsk said the Ukrainian troops had given up their vehicles to the rebels after talks.
The Defense Ministry in Kiev said the vehicles had been captured. "A column was blocked by a crowd of local people in Kramatorsk with members of a Russian diversionary-terrorist group among them," it said. "As a result, extremists seized the equipment."
Overhead, a Ukrainian jet fighter carried out several minutes of aerobatics above the town's main square. A government official said Ukraine's defense minister was traveling to Kramatorsk to try to clarify the situation.
The pro-Russian separatists began the uprising in the east by seizing government buildings in three cities on April 6, and they have tightened their grip in recent days. Their armed paramilitaries now control buildings in about 10 towns and have seized hundreds of weapons.
Two people were killed on Sunday in Slovyansk, including a Ukrainian state security agent shot dead.
Kiev calls the uprising a blatant repeat of the seizure of Crimea, where armed pro-Russian partisans also occupied buildings, declared independence and proclaimed themselves in charge of state bodies. The main difference so far is that Russian troops have not appeared overtly as they did in Crimea, where Moscow already had military bases.
NATO says there are 40,000 Russian soldiers amassed on the frontier, forces which could capture eastern Ukraine in days.