NATO, Ukriane say Russian armoured vehicles crossed the border.
Russian military vehicles crossed into Ukraine during the night, NATO and Ukraine said Friday, and the Ukrainian president said most of them were quickly destroyed by his troops.
The reported Russian incursion, which Moscow denied, came amid a week of drama over a Russian humanitarian aid mission for people in eastern Ukraine caught in the crossfire of fighting between government troops and pro-Russian separatists.
A statement on President Petro Poroshenko's website said he and British Prime Minister David Cameron spoke Friday by telephone about the reports from Western journalists that Russian APCs were seen crossing into Ukraine near the point where over 200 vehicles in the Russian aid convoy were parked.
"The president said that the given information was trustworthy and confirmed because the majority of the vehicles were destroyed by Ukrainian artillery at night," the presidential statement said.
Poroshenko gave no proof for his comments.
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Russia said Russian forces were patrolling the border but denied that any military vehicles had crossed into Ukraine. NATO secretary-general Anders Fogh Rasmussen, however, confirmed that the alliance had observed a Russian "incursion" into Ukraine.
"What we have seen last night is the continuation of what we have seen for some time," he said during a visit to Copenhagen.
Britain said it summoned Russian Ambassador Alexander Yakovenko in to clarify the reports of the Russian incursion.
Markets sold off heavily Friday, spooked by thought of Ukrainian troops engaging with Russia forces inside Ukraine. Germany's DAX, which had been trading over 1 percent higher, ended the day 1.4 percent lower. The benchmark price of oil was up over $1 to $96.70 per barrel.
"Traders will be anxiously scanning their newsfeeds for any sign of a Russian response over the coming hours," said Chris Beauchamp, market analyst at IG.
Breaking an earlier deal, Russia this week sent the convoy of roughly 200 aid trucks toward a border crossing under the control of pro-Russia separatists in eastern Ukraine, raising the prospect that it could enter without being inspected by Ukraine or the Red Cross. Kiev had agreed to admit the trucks, but only through a region untouched by separatist unrest.
After days of controversy, Russia nominally consented to let Ukrainian officials inspect the convoy while it was still on Russian soil and agreed that the Red Cross would distribute the goods in Ukraine's region of Luhansk.
The twin moves apparently aimed to dispel Ukrainian fears that the operation was a ruse to get military help to the pro-Russian separatists.
Laurent Corbaz, the International Committee of the Red Cross' director of operations in Europe, described a tentative plan in which the trucks would enter Ukraine with a single Russian driver each - as opposed to the current crew of several people in each truck - accompanied by a Red Cross worker. In line with Red Cross policy, there would be no military escort, he said.
However, some Russian military vehicles were seen near the aid convoy Friday carrying a Russian acronym standing for "peacekeeping forces" - a signal that Moscow was considering a possible military escort.
The fighting in eastern Ukraine has claimed nearly 2,100 lives, half of those in the last few weeks. It began in April, a month after Russia annexed Ukraine's Black Sea peninsula of Crimea.
The city of Luhansk has suffered extensively from an intense military barrage over the last few weeks. The city remains cut off from power and water supplies, and its mobile and landline telephone systems barely function, local authorities said Friday. Little food is available but bread is still being made using portable generators.
Ukraine, meanwhile, proceeded with its own aid mission to the Luhansk area. Trucks sent from the eastern city of Kharkiv were unloaded Friday at warehouses in the town of Starobilsk, where the goods were to be sorted and transported further by the Red Cross. Starobilsk is 100 kilometers (60 miles) north of Luhansk.
Other Ukrainian aid was taken to the town of Lysychansk, which retaken by Ukrainian forces late last month but has seen sporadic clashes until earlier this week.
Dozens of houses showed signs of damage Friday in Lysychansk - some had windows blown out, while others had been blasted or burned to the ground. An Associated Press reporter saw small children playing in the rubble of one destroyed house.
As Ukrainian emergency workers discussed how to distribute the aid, clusters of older women and small children began appearing on the town's streets. Residents said the aid was the first they had seen since fighting had ended.