Ukraine and its Western allies have accused Russia of sending hundreds of troops, sophisticated weaponry and tanks across the border into the southeast of the country.
A spokesman for Ukraine’s National Security Council, Colonel Andriy Lysenko, said two columns of Russian tanks had fired at a border post, before rolling into the country.
The tanks are reported to have crossed into a southern area of the Donetsk region, where the separatists have made significant gains in recent days.
Nato, meanwhile, released satellite imagery purportedly showing self-propelled artillery battery.
A Nato official also said at least 1,000 Russian troops had entered Ukraine with sophisticated equipment and had been in “direct contact” with Ukrainian forces, resulting in casualties.
Dutch Brigadier-General Nico Tak, head of the body’s crisis management centre, said: “They are supporting separatists (and) fighting with them.”
Senior separatist commander Alexander Zakharchenko has admitted that between 3,000 and 4,000 Russian fighters have fought in the rebel ranks, but said they were on “holiday” and had volunteered to join the battle.
Moscow has consistently denied arming the rebels or sending troops across the border, and said the latest claims bore “no relation to reality.”
However at a crisis meeting of the UN Security Council, British Ambassador Mark Lyall Grant listed “overwhelming” evidence to the contrary.
“It is simply not credible for Russia and its proxies in (the eastern regions of) Donetsk and Luhansk to keep claiming that these serving members of the Russian armed forces are in Ukraine by accident or on holiday,” he said.
“Nor is it credible for Russia to continue claiming to the whole world including to the Russian people that Russian soldiers are not present in Ukrainian territory.”
In an earlier statement Prime Minister David Cameron said he was “extremely concerned” by mounting evidence that Russia is “completely disregarding the sovereignty of a neighbour.
“The international community has already warned Russia that such provocative actions would be completely unacceptable and illegal.”
He called on Russia to immediately cease all military activity in Ukraine or face “further consequences.”
US President Barack Obama gave a similar warning at a press conference in Washington.
Stopping short of calling Russia’s actions an invasion, Mr Obama said the US and its allies would look for ways to expand economic sanctions in light of Russia’s “ongoing incursion.”
However he ruled out taking any military action to resolve the conflict.
Nato is due to hold its own emergency meeting on Friday, while German Chancellor Angela Merkel said an EU summit on Saturday would also discuss the prospect of further sanctions.
