RUSSIA has massed around 20,000 combat-ready troops on Ukraine's border and could use the pretext of a humanitarian mission to invade, Nato has claimed.
The organisation made its comments in its starkest warning yet that Moscow could soon mount a ground assault against its neighbour.
With fighting escalating and rebels losing ground in the weeks since a Malaysian airliner was shot down over separatist-held territory, Russia has announced military exercises this week in the border region.
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Nato spokeswoman Oana Lungescu said in a statement: "We're not going to guess what's on Russia's mind, but we can see what Russia is doing on the ground - and that is of great concern. Russia has amassed around 20,000 combat-ready troops on Ukraine's eastern border."
Moscow could use "the pretext of a humanitarian or peace-keeping mission as an excuse to send troops into Eastern Ukraine", she said.
Moscow annexed Ukraine's Crimea peninsula in the Black Sea in March, and Western countries say it funded and armed pro-Russian rebels that rose up in the east of Ukraine in April.
Since June, government troops have gained ground against the rebels, who are led almost exclusively by Russian citizens and have managed to acquire tanks, missiles and other heavy weaponry Kiev and its Western allies say can only have come from across the frontier.
Kiev said 18 Ukrainian servicemen had been killed and 54 injured in 25 separate clashes over the past day in eastern Ukraine. A military spokesman said troops had been shelled from inside Russian territory and frontier guards had come under a four-hour mortar and artillery attack.
Fighting has intensified since Malaysian flight MH17 crashed on July 17, killing all 298 people on board.
Western countries say it was shot down by rebels with an advanced anti-aircraft missile supplied by Russia. Moscow denies blame, and the Russians who command the rebels deny they had such missiles.
The United States and the European Union imposed sanctions on Russia that were mild at first but have been tightened sharply since the airliner was brought down.
Kiev's military offensive has pushed the rebels out of many of their strongholds, leaving them largely besieged in the cities of Donetsk and Luhansk, which the rebels have proclaimed capitals of two "people's republics".
Residents in Donetsk, east Ukraine's main industrial hub and now the principal rebel redoubt, said Ukrainian war planes had carried out air strikes overnight.
Reporters heard the planes roar overhead and massive explosions during the night. In the morning, an industrial district one to two miles from the city centre was pocked with craters, including two huge holes seven yards wide and six feet deep, ripped into the asphalt.
One woman who lives nearby said: "The planes were flying low. Then there were two massive explosions and the glass was blown out of the window. It was terrifying.
"This is war. There will never be peace."
Government military spokesman Lysenko denied Ukrainian planes had carried out air strikes.
He said: "The Ukrainian military does not bomb the towns of Donetsk and Luhansk or any other similar populated places."