Media playback is unsupported on your device Media caption Ukrainian President Petro Poroshenko: "We are very close to the point of no return" 
 
 EU leaders are meeting in Brussels to discuss the crisis in Ukraine, threatening to impose fresh sanctions against Russia. 
 
 EU foreign policy chief Catherine Ashton accused Russia of "direct aggression" in eastern Ukraine. 
 
 Ukrainian President Petro Poroshenko said his country was "close to a point of no return - full scale-war". 
 
 Russia denies that its forces are backing rebels, who have been gaining ground on Ukrainian forces. 
 
 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. 
 
 As she arrived at the talks in Brussels, Lithuanian President Dalia Grybauskaite said Russia was "practically in a war against Europe". 
 
 Media playback is unsupported on your device Media caption Lithuanian President Dalia Grybauskaite says Russia is "practically in a war against Europe" 
 
 She said: "We need to support Ukraine, and send military materials to help Ukraine defend itself. Today Ukraine is fighting a war on behalf of all Europe." 
 
 UK Prime Minister David Cameron said the EU faced "a completely unacceptable situation of having Russian troops on Ukrainian soil. Consequences must follow if that situation continues". 
 
 Image copyright AFP Image caption The Ukrainian army has been fighting pro-Russian separatists for months 
 
 Image copyright AP Image caption Pro-Russian rebels have mounted a counter-offensive in recent days 
 
 French President Francois Hollande said the Ukraine crisis was the biggest since the end of the Cold War. 
 
 He said: "What's happening in Ukraine is so serious that the European Council will be obliged to react by increasing the level of sanctions if things remain as they are." 
 
 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. 
 
 However, the BBC's Chris Morris in Brussels says there are still divisions within the EU on how to deal with the Ukraine situation. 
 
 Finnish Prime Minister Alexander Stubb said the "jury is still out" on whether sanctions had worked, adding: "We need to find a ceasefire, a peace plan." 
 
 Image copyright AP Image caption Petro Poroshenko meets David Cameron in Brussels ahead of the summit 
 
 Mr Poroshenko, who is at the summit, said Ukraine was a victim of "military aggression and terror" involving "thousands of foreign troops and hundreds of foreign tanks". 
 
 He said that new EU sanctions against Russia would be prepared and would be implemented depending on the success of his peace plan. 
 
 He said he hoped to publish a draft of the peace plan next week. 
 
 Mr Poroshenko also said that he would discuss the possibility of a ceasefire at a meeting in Belarus on Monday of the Contact Group, which includes Ukraine, Russia, Belarus and the Organization for Security and Cooperation in Europe (OSCE). 
 
 'Ordered to retreat' 
 
 Government forces 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". 
 
 Spokesman Andriy Lysenko said troops had been ordered to retreat from Novosvitlivka. 
 
 Troops are also reportedly trying to evacuate Ilovaisk in the Donetsk region. It has been surrounded by rebels. 
 
 Media playback is unsupported on your device Media caption Cars queue to leave Mariupol, from where Yuri Vendik reports 
 
 Rebel leader Alexander Zakharchenko told the Russian News Service radio station a new offensive was being planned to create a corridor between Donetsk and Luhansk. 
 
 In south-eastern Ukraine, people have been leaving the port city of Mariupol, after advancing rebels captured Novoazovsk to the east. 
 
 Western and Ukrainian officials say this offensive has been substantially helped by Russian regular troops, opening a new front. Russia denies the accusation. 
 
 Some 2,600 people have died in fighting in the Donetsk and Luhansk regions since April. 
 
 The conflict erupted following Russia's annexation of Ukraine's southern Crimea peninsula a month before. 
 
 War in eastern Ukraine: The human cost ||||| European leaders, he added, had long stated that any further escalation of the conflict would set off additional sanctions, and they would “be ready to take some more measures” at the meeting in Brussels. 
 
 President François Hollande of France also backed new measures against Russia, telling journalists in Brussels that “what is happening in Ukraine is so serious” that European leaders were obliged to increase sanctions. 
 
 But France is expected to block calls by some leaders to extend an existing ban on future military sales to Russia to include already signed contracts. France has resisted pressure from Washington and some European capitals to cancel a contract for the sale of two naval assault ships to Russia, a deal worth 1.2 billion euros, or about $1.6 billion. 
 
 Arriving Saturday for the summit, Dalia Grybauskaite, the president of Lithuania, demanded that existing and future military contracts with Russia be prohibited. Europe, she said, could not “listen to the lies that we are receiving from Putin” and should offer military support to Ukraine. Russia, she added, was “in a state of war against Ukraine and that means that it is in a state of war against countries that want to be closer to the European Union and that means practically that Russia is in a state of war against Europe. That means we have to help Ukraine battle back, to defend its territory and its people, to help militarily.” 
 
 Fighting in eastern Ukraine has been going on for months, mostly around rebel-held Donetsk and Luhansk. But the conflict expanded last week after the rebels — backed by Russian forces, according to NATO — opened a front along a coastal road leading to the industrial port city of Mariupol. 
 
 Ukrainian military units and the civilian population were preparing on Saturday to defend the city against any assault by the Russian-backed militias, Ukraine’s military spokesman, Col. Andriy Lysenko, said in Kiev, the Ukrainian capital. 
 
 “We are very grateful to the Mariupol residents, who have also helped in the fortification of the city against the armored vehicles of the enemy,” Colonel Lysenko said. The city fell briefly under the control of pro-Russian fighters earlier this year, but after they were driven out it had been firmly in the hands of Ukraine. The governor of the Donetsk region, forced from his headquarters in the city of Donetsk, decamped there to maintain a formal, if largely impotent, government presence. ||||| KIEV/BRUSSELS Ukraine said Russian tanks had flattened a small border town and pro-Russian rebels had made fresh gains in its east, as EU leaders signaled on Saturday they would threaten more sanctions against Moscow over the crisis. 
 
 Ukrainian President Petro Poroshenko, attending an EU summit in Brussels, said he was hoping for a political solution, but warned that his country was on the brink of full-scale war. 
 
 Russia has repeatedly dismissed accusations from Kiev and Western powers that it has sent soldiers into its neighbor, or supported pro-Russian rebels fighting a five-month-old separatist war in Ukraine's east. 
 
 But Ukraine military spokesman Andriy Lysenko told journalists in Kiev that Russian tanks had entered the small Ukrainian town of Novosvitlivka on the border with Russia and fired on every house. 
 
 "We have information that virtually every house has been destroyed," Lysenko added, without giving details on when the reported attack took place. Ukraine's daily military briefings typically cover the previous 24 hours. 
 
 Lysenko said the rebels had made new gains just east of the border city of Luhansk, one of the rebels' main strongholds, after opening up a new front in another area last week. 
 
 "Direct military aggression by the Russian Federation in the east of Ukraine is continuing. The Russians are continuing to send military equipment and 'mercenaries'," Ukraine's defense and security council said in a separate Twitter post. 
 
 Kiev and Western countries say recent rebel gains were the result of the arrival of armored columns of Russian troops, sent by Russian President Vladimir Putin to prop up a separatist rebellion that would otherwise have been near collapse. 
 
 There was no immediate fresh comment from Russia on Saturday. Putin on Friday compared Kiev's drive to regain control of its rebellious eastern cities to the Nazi invasion of the Soviet Union in World War Two. 
 
 "NO TIME TO WASTE" 
 
 EU leaders meeting in Brussels appointed Polish Prime Minister Donald Tusk as president of the European Council, giving hawkish Kremlin critics in Eastern Europe new influence in the bloc. 
 
 According to a draft statement from the summit, the EU leaders were set to ask the European Commission and the EU's diplomatic service "to urgently undertake preparatory work" on further sanctions that could be implemented if necessary. 
 
 French President Francois Hollande stressed that a failure by Russia to reverse a flow of weapons and troops into eastern Ukraine would force the bloc to impose new economic measures. 
 
 "Are we going to let the situation worsen, until it leads to war?" Hollande said at a news conference. "Because that's the risk today. There is no time to waste." 
 
 European Commission President Jose Manuel Barroso said the EU was prepared to toughen sanctions against Russia but also that it wanted a political deal to end the confrontation. 
 
 "We are ready to take very strong and clear measures but we are keeping our doors open to a political solution," Barroso said at a news conference with Ukraine's president. 
 
 Poroshenko said the crisis was close to a tipping point. 
 
 "I think we are very close to the point of no return. The point of no return is full-scale war, which already happened on the territory controlled by separatists," he said. 
 
 He added, however, that a trilateral meeting on Monday involving representatives of Kiev, Moscow and the European Union could produce a ceasefire. 
 
 SHOTS FIRED 
 
 The crisis started when Ukraine's Moscow-backed president was ousted by street protests in February after he ditched a pact with the EU that would have moved the ex-Soviet republic firmly toward Europe and away from Russia. 
 
 Russia denounced the pro-Western leadership that took over as "a fascist junta" and went on to annex Ukraine's Crimea peninsula. Pro-Russian separatists then rebelled in Ukraine's mainly Russian-speaking east in April, setting up 'people's republics' and declaring they wanted to join Russia. 
 
 A senior U.N. human rights official said on Friday nearly 2,600 civilians, Ukrainian government forces and rebels had been killed in a conflict which has led to the biggest Russia-West crisis since the Cold War. 
 
 In Kiev, Ukraine's Interior Minister Arsen Avakov said a group of pro-Ukrainian fighters had broken out of encirclement by pro-Russian rebels near Donetsk early on Saturday, though other reports suggested many remained trapped. 
 
 Defense Minister Valery Heletey also ordered a clamp-down on information coming out of Ilovaysk, a town to the east of Donetsk. 
 
 Indicating government forces were being pulled back from the area, Heletey said on his Facebook page: "As soon as the danger for Ukrainian units has passed, all open information for the current period relating to the withdrawal of forces from Ilovaysk will be published." 
 
 Last week pro-Russian rebels opened a new front in a separate, coastal territory along the Sea of Azov and pushed Ukrainian troops out of the town of Novoazovsk. They are now threatening the strategic port city of Mariupol. 
 
 Several shots were fired on Saturday at a car carrying Alexander Zakharchenko, leader of the breakaway Donetsk People's Republic, but he escaped unscathed, another separatist leader, Sergei Kavtaradze, told Reuters. 
 
 "Zakharchenko wasn't hurt. His driver was wounded and is being operated on," Kavtaradze said, adding that an operation was under way to catch whoever had fired the shots. 
 
 (Additional reporting by Pavel Polityuk in Kiev and Anton Zverev in Donetsk; Writing by Richard Balmforth; Editing by Andrew Heavens and Robin Pomeroy) ||||| BRUSSELS (AP) — The European Union on Saturday warned that the apparent incursion of Russian troops on Ukrainian soil pushes the conflict closer to a point of no return, with new economic sanctions being drawn up to make Moscow reconsider its position. 
 
 Ukrainian President Petro Poroshenko, right, talks with German Chancellor Angela Merkel during an European People's Party summit ahead of the EU summit in Brussels, Saturday, Aug. 30, 2014. EU leaders,... (Associated Press) 
 
 Comrades and Crimea's self-defense fighters carry the coffin of former paratrooper Alexander Gusev, 46, covered by Russian paratroopers flag, who was killed during clashes with Ukrainian troops in eastern... (Associated Press) 
 
 Ukrainian President Petro Poroshenko, left, shakes hands with British Prime Minister David Cameron, prior to a bilateral meeting, ahead of an EU summit in Brussels, Saturday, Aug. 30, 2014. EU leaders,... (Associated Press) 
 
 Captured Russian paratroopers are seen in this image taken from video in Kiev on Wednesday Aug. 27. 2014. Ten Russian paratroopers were captured this week in Ukraine, adding to a growing body of evidence... (Associated Press) 
 
 Ukrainian President Petro Poroshenko, who briefed a summit of the 28-nation EU's leaders in Brussels, said a strong response was needed to the "military aggression and terror" facing his country. 
 
 "Thousands of the foreign troops and hundreds of the foreign tanks are now on the territory of Ukraine," Poroshenko told reporters in English. "There is a very high risk not only for peace and stability for Ukraine, but for the whole peace and stability of Europe." 
 
 French President Francois Hollande and Swedish Prime Minister Fredrik Reinfeldt said upon their arrival for the summit in Brussels the leaders will make a political decision and then ask the EU's executive arm to finalize the fine print of new sanctions. 
 
 However, because several EU nations fear the fallout of sanctions on their own economies, it wasn't immediately clear whether the required unanimity would be reached for immediate punitive measures, or whether the leaders would set Russia another ultimatum. 
 
 But Lithuanian leader Dalia Grybauskaite insisted Russia's meddling in Ukraine, which seeks closer ties with the EU, amounts to a direct confrontation that requires stronger sanctions. 
 
 "Russia is practically in the war against Europe," she said in English. 
 
 NATO estimates that at least 1,000 Russian soldiers are in Ukraine even though Russia denies any military involvement in the fighting that has so far claimed 2,600 lives, according to U.N. figures. 
 
 British Prime Minister David Cameron also warned that Europe can't be complacent about Russian troops on Ukrainian soil. 
 
 "Countries in Europe shouldn't have to think long before realizing just how unacceptable that is," he said. "We know that from our history. So consequences must follow." 
 
 Conceding ground in the face of a reinvigorated rebel offensive, Ukraine said Saturday that it was abandoning a city where its forces have been surrounded by rebels for days. Government forces were also pulling back from another it had claimed to have taken control of two weeks earlier. 
 
 The statements by Col. Andriy Lysenko, a spokesman for the national security council, indicate that Ukrainian forces face increasingly strong resistance from Russian-backed separatist rebels just weeks after racking up significant gains and forcing rebels out of much of the territory they had held. 
 
 Poroshenko, meanwhile, said Ukraine would welcome an EU decision to help with military equipment and further intelligence-sharing. 
 
 The office of the Donetsk mayor reported in a statement that at least two people died in an artillery attack on one of Donetsk's neighborhoods. Shelling was reported elsewhere in the city, but there was no immediate word on casualties. 
 
 In Brussels, European Commission President Jose Manuel Barroso said "sanctions are not an end in themselves," but a means to dissuade Russia from further destabilizing Ukraine. 
 
 "We may see a situation where we reach the point of no return," Barroso warned. "If the escalation of the conflict continues, this point of no return can come." 
 
 He provided no specifics about which sanctions the heads of state and government might adopt to inflict more economic pain to nudge Russia toward a political solution. 
 
 The U.S. and the EU have so far imposed sanctions against dozens of Russian officials, several companies and the country's financial industry. Moscow has retaliated by banning food imports. 
 
 Grybauskaite said the EU should impose a full arms embargo, including the canceling of already agreed contracts. France has so far staunchly opposed that proposal because it has a $1.6 billion contract to build Mistral helicopter carriers for Russia. 
 
 The EU's requirement for a unanimous agreement among the 28 nation has in the past blocked or softened decisions since some nations fear the economic fallout. 
 
 Russia is the EU's No. 3 trading partner and one of its biggest oil and gas suppliers. The EU, in turn, is Russia's biggest commercial partner, making any sanctions more biting than similar measures adopted by the U.S. 
 
 Barroso said that the EU — a bloc encompassing 500 million people and stretching from Lisbon to the border with Ukraine — stands ready to grant Kiev further financial assistance if needed. The bloc will also organize a donors' conference to help rebuild the country's east at the end of the year, he added. 
 
 Ukrainian forces had been surrounded by rebels in the town of Ilovaysk, about 20 kilometers (15 miles) east of the largest rebel-held city of Donetsk for days. 
 
 "We are surrendering this city," Ukraine's Lysenko told reporters. "Our task now is to evacuate our military with the least possible losses in order to regroup." 
 
 Lysenko said that regular units of the military had been ordered to retreat from Novosvitlivka and Khryashchuvate, two towns on the main road between the Russian border and Luhansk, the second-largest rebel-held city. Ukraine had claimed control of Novosvitlivka earlier in August. 
 
 Separately, Ukrainian forces said one of their Su-25 fighter jets was shot down Friday over eastern Ukraine by a missile from a Russian missile launcher. The pilot ejected and was uninjured, the military said in a brief statement. 
 
 ___ 
 
 Jim Heintz reported from Kiev. Nataliya Vasilyeva in Moscow contributed reporting. 
 
 ___ 
 
 Follow Juergen Baetz on Twitter at http://www.twitter.com/jbaetz ||||| The European Union has warned that the apparent incursion of Russian troops on Ukrainian soil pushes the conflict closer to a point of no return, with new economic sanctions being drawn up to make Moscow reconsider its position. 
 
 The Ukrainian president, Petro Poroshenko, who briefed a summit of the 28-nation EU's leaders in Brussels, said a strong response was needed to the "military aggression and terror" facing his country. 
 
 "Thousands of foreign troops and hundreds of foreign tanks are now on the territory of Ukraine," Poroshenko told reporters in English. "There is a very high risk not only for peace and stability for Ukraine, but for the whole peace and stability of Europe." 
 
 However, because several EU nations fear the fallout of sanctions on their own economies, it wasn't immediately clear whether the required unanimity would be reached for immediate punitive measures, or whether the leaders would set Russia another ultimatum. 
 
 Lithuanian leader Dalia Grybauskaite insisted Russia's meddling in Ukraine, which seeks closer ties with the EU, amounts to a direct confrontation that requires stronger sanctions. "Russia is practically at war against Europe," she said, also in English. Calling on EU countries to supply Kiev with military equipment, she went on: "That means we need to help Ukraine to … defend its territory and its people and to help militarily, especially with the military materials to help Ukraine defend itself because today Ukraine is fighting a war on behalf of all Europe." 
 
 Nato estimates that at least 1,000 Russian soldiers are in Ukraine even though Russia denies any military involvement in the fighting that has according to the UN claimed 2,600 lives. 
 
 David Cameron also warned that Europe cannot be complacent about Russian troops on Ukrainian soil. "Countries in Europe shouldn't have to think long before realising just how unacceptable that is," he said. "We know that from our history. So consequences must follow." 
 
 Poroshenko told reporters that he believed efforts to halt the violence were "very close to a point of no return," warning that failure could lead to a "full-scale war." 
 
 Conceding ground in the face of a reinvigorated rebel offensive, Ukraine said Saturday that it was abandoning a city where its forces have been surrounded by rebels for days. Government forces were also pulling back from another it had claimed to have taken control of two weeks earlier. The Ukrainian military also reported that one of its fighter jets had been shot down by Russian anti-aircraft fire, although the pilot managed to eject to safety. 
 
 The statements by Col Andriy Lysenko, a spokesman for the national security council, indicate that Ukrainian forces face increasingly strong resistance from Russian-backed separatist rebels just weeks after racking up significant gains and forcing rebels out of much of the territory they had held. 
 
 The office of the Donetsk mayor reported in a statement that at least two people died in an artillery attack on one of Donetsk's neighborhoods. Shelling was also reported elsewhere in the city. 
 
 Poroshenko said Ukraine would welcome an EU decision to help with military equipment and further intelligence-sharing. 
 
 In Brussels, European Commission President Jose Manuel Barroso said "sanctions are not an end in themselves," but a means to dissuade Russia from further destabilising Ukraine. 
 
 "If the escalation of the conflict continues, this point of no return can come." 
 
 He provided no specifics about which sanctions the heads of state and government might adopt to inflict more economic pain to nudge Russia toward a political solution. 
 
 Grybauskaite added that an arms embargo on Russia should be tightened by including a halt on sales under existing contracts – a thinly-veiled swipe at France, which has resisted calls to cancel a deal to sell Moscow a strategic new warship. This came after the German vice-chancellor, Sigmar Gabriel, told journalists: "It is clear that after this intervention by Russia in Ukraine … EU leaders will certainly task the European commission with preparing the next level of sanctions." 
 
 "We see regular Russian army units operating offensively on the Ukrainian territory against the Ukrainian army. We must call a spade a spade," said the Swedish foreign minister, Carl Bildt. 
 
 All options except military action will be considered to punish Russia for pursuing "the wrong path", said Jean Asselborn, Luxembourg's foreign minister. 
 
 According to Agence France-Presse (AFP), Putin held late-night discussions about Ukraine with the French president, François Hollande, and Barroso. 
 
 Kiev and Moscow had agreed to hold high-level discussions between army leadership and border control agencies, and an official told AFP that heads of border control will meet on Saturday. "They will discuss measures to protect Ukrainian territory from breaches by militants and equipment," Sergiy Astakhov, an aide to the head of Kiev's border service, said. 
 
 UN figures suggest that fighting between Ukrainian military forces and Russian-backed separatists in eastern Ukraine has already claimed at least 2,200 lives. 
 
 Nato estimates that there are at least 1,000 Russian soldiers in Ukraine, while Kiev claimed this week that Russian tanks and armoured vehicles entered the country as rebels opened a new front along the Azov Sea coast. Russia consistently denies that its forces are in Ukraine and allegations that it is supplying the rebels. 
 
 Until this week, the fighting had been concentrated inland. But rebels have taken control of the town of Novoazovsk, with the apparent aim of pushing further west along the coast connecting Russia to the Crimean peninsula.
– Today's key phrase on the Russian-Ukraine situation is the "point of no return." The leader of the European Commission warned today that Moscow has brought the world to the brink of that point with its aggression toward its neighbor, reports the BBC. Jose Manuel Barroso spoke as EU leaders gathered in Brussels. With Russia showing no sign of letting up, or even admitting that it's helping pro-Russian separatists despite mounting evidence to the contrary, it's not clear what happens after the point of no return, though European leaders are threatening more sanctions. Also: Ukraine leader Petro Poroshenko used similar language to Barroso, reports the New York Times. "We are too close to a border where there will be no return to the peace plan," he said, asserting that "thousands of foreign troops and hundreds of foreign tanks are now on the territory of Ukraine, with a very high risk not only for the peace and stability of Ukraine but for the peace and stability of the whole of Europe." (Russia says any of its troops there are fighting of their own accord while on leave.) Lithuanian leader Dalia Grybauskaite said this, in English, reports AP: "Russia is practically in the war against Europe." Jet shot down: The Ukraine military said one of its fighter jets was shot down over eastern Ukraine by a Russian missile yesterday, reports the Guardian. The pilot ejected safely. Marching on: Pro-Russian rebels backed by Russian soldiers made more gains in the east, reports Reuters. Ukraine's military said tanks entered the small border town of Novosvitlivka and opened fire on houses.