Ukrainian troops have entered the eastern town of Kramatorsk a day after an operation began to recapture areas seized by anti-government separatists.
But the Ukrainian defence ministry says six armoured personnel carriers were captured by pro-Russian militants.
Other reports suggest the Ukrainian troops may have abandoned their vehicles or changed sides.
Tension is increasing across eastern Ukraine where pro-Russian protesters have seized public buildings.
The crisis escalated this month after pro-Russian rebels occupied buildings in about 10 towns and cities, demanding greater autonomy or referendums on secession.
In the city of Donetsk, which has seen weeks of unrest, pro-Russian gunmen have taken control of the mayor’s office.
Tens of thousands of Russian soldiers are believed to have massed on Ukraine’s borders since Russia took control of the Ukrainian region of Crimea last month, following a controversial referendum on self-determination.
As tensions rose, Ukraine’s acting Defence Minister Mykhailo Koval headed for the east of the country to monitor the progress of the “anti-terrorist operation” announced by acting President Olexander Turchynov on Tuesday.
The interim Prime Minister, Arseniy Yatsenyuk, called on Russia to “stop supporting terrorists in Ukraine”.
‘Not to fight’
After Ukrainian forces recaptured an airfield outside Kramatorsk on Tuesday, armoured vehicles appeared in the centre of the town early on Wednesday.
BBC journalists witnessed civilians, at least some of whom appeared to be local people, challenging soldiers, who were also blocked by a crowd a few kilometres outside the town.
One officer said he had not “come to fight” and would never obey orders to shoot his “own people”.
Video later emerged of six armoured personnel carriers, flying Russian flags, entering the nearby town of Sloviansk.