At least 14 people, including a general, were killed Thursday when a Ukrainian military helicopter was shot down by "terrorists" near
Slovyansk, acting President Oleksandr Turchynov told parliament.
Turchynov said the chopper, which was carrying soldiers for a troop rotation, was shot down using a Russian rocket-propelled grenade launcher.
Militants in the rebel stronghold claimed responsibility for downing the helicopter, a spokesman for the militants said. The aircraft had flown there from Kramatorsk, he said, where the Ukrainian military has a substantial presence.
The large loss of life will be a major blow to the Ukrainian military, which on Monday toughened its approach to the separatist movement when it launched a fierce assault on militants who'd taken control of part of Donetsk airport.
Also in Slovyansk, the self-declared mayor told CNN that pro-Russia separatist militants are holding four European observers who have been missing since Monday.
But he declined to say where exactly.
"Our militants got them," Vyacheslav Ponomarev said Thursday. "They were detained because they didn't respect my request. I asked them not to leave Donetsk (city). They decided they were smarter and could come here."
Ponomarev added that the monitors from the Organization for Security and Co-operation in Europe were not being held in the town.
They also are not "exchange material," he said, indicating they were not being held to swap for separatists detained by Kiev authorities.
Ponomarev said he had been in contact with the OSCE, and they were assessing the situation. He said he would likely release the monitors soon, but wouldn't say when.
On Wednesday, Ukrainian Foreign Ministry spokesman Yevhen Perebynis said a pro-Russia group was holding the OSCE monitors.
"The negotiations for their release are in process," Perebynis said.
The four team members, who are Swiss, Turkish, Estonian and Danish, were on a routine patrol Monday east of Donetsk city when last heard from, according to the OSCE.
The last time an OSCE team went missing in the Donetsk region, its members also turned up in the hands of the militant separatists in Slovyansk -- and were described by Ponomarev as "prisoners of war." They were freed just over a week later.
There were fears Wednesday that another group of 11 monitors had gone missing after being stopped at a roadblock in Marinka, west of Donetsk, but the group re-established contact with the OSCE after returning to Donetsk, according to an OSCE statement.