Ukraine’s military pulled back its forces from defending a checkpoint near Luhansk on Monday in the latest retreat for Kyiv-backed troops.
Locals had taken shelter in cellars while the fighting raged. Ukraine soldiers said the separatists had Russian support.
The strategic port city of Mariupol appears to be a rebel target after intense fighting in the area. Some believe Russia wants to establish a supply corridor for Crimea.
One injured Ukrainian soldier said: “They were Russians. We saw them with our own eyes, from the Russian border they were shooting at us.”
The earlier seizure of part of the coastline near Mariupol provided a place from which a coastguard patrol boat was shelled at the weekend.
Kyiv has now released video of the incident – the first action at sea in the conflict.
Two members of the Ukrainian crew are missing while eight were rescued and are being treated for burns.