The sense of foreboding in Kiev came as European-mediated talks over the fast-escalating crisis opened on Monday in the Belarussian capital Minsk behind closed doors, attended by government, separatist and Russian envoys.
The rebels have launched a major counteroffensive in recent days that the Ukrainian government and its Western allies claim is backed by Russian forces - a charge Moscow denies.
Ukraine's Defence Minister Valeriy Geletey vowed on Monday to "immediately mount defences against Russia, which is trying not only to secure positions held by terrorists before but to advance on other territories of Ukraine".
"A great war arrived at our doorstep, the likes of which Europe has not seen since World War II," he wrote on Facebook, warning of "tens of thousands of deaths".
Russian agencies quoted rebel representatives demanding at the Belarus meeting that Kiev provides the separatist regions of Donetsk and Lugansk with a "unique procedure" that would let them integrate closer with Russia.
The developments come a day after Russian President Vladimir Putin evoked for the first time that the issue of "statehood" should be brought up in talks on the crisis in the east, where fighting has killed over 2600 people since mid-April.
Putin accused Europe of ignoring the Ukrainian military's "direct targeting" of civilians in the conflict and said the offensive pushed by insurgents there were simply an attempt to expel Kiev's forces from residential areas.
Kiev said its forces south of the rebel hub of Lugansk were forced to retreat from the local airfield and a nearby village after withstanding artillery fire and battling a Russian tank battalion.
The retreat marked the latest setback for Ukrainian troops, which had been closing in on rebels in Donetsk and Lugansk until about a week ago.
Since then, the rebels' lightning offensive has forced Ukrainian army units to abandon numerous positions and gear up to defend the important southeastern port city of Mariupol.
On the Azov Sea coast, where the Kiev government still controls the 500,000-strong Mariupol, rocket launchers were used to fire on two Ukrainian patrol boats offshore. Two border guards from one of the crews went missing, Kiev said.
Rights activists in Moscow told AFP that up to 15,000 Russian soldiers had been sent across the Ukrainian border over the past two months.
NATO chief Anders Fogh Rasmussen said ahead of the Western military alliance's two-day summit in Wales that opens on Thursday that the growing Russian threat meant the Cold War-era bloc must create a bigger presence in eastern Europe.
"We must face the reality that Russia... considers NATO an adversary," he told reporters. "We cannot afford to be naive."
Russia has repeatedly denied helping the insurgency, with Foreign Minister Sergei Lavrov declaring on Monday that "there will be no military intervention (in Ukraine)".
Lavrov also called for an "immediate and unconditional ceasefire" to be discussed in Minsk.
The European Union warned Moscow on Sunday that it would slap it with fresh sanctions unless it reversed course in the crisis within a week.
Putin responded on Monday by saying that he hoped "common sense will prevail" and urged the bloc to "work together normally" with Moscow.
The Russian ruble slid to a record low of 37.39 to the US dollar on the latest developments, though the Russian stock markets were broadly stable after opening Monday.
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