Pro-Russian separatists have shot down a Ukrainian army helicopter, killing at least 12 soldiers.
The deadly incident came as United States Secretary of State John Kerry struck a positive note, saying that Russian troops that had been on the border between Russia and Ukraine have pulled back.
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A day after President Obama delivered a major foreign policy speech, United States Secretary of State John Kerry says the US sanctions against Russia have had a "profound impact" with Russian troops moving back towards Moscow, not towards Kiev.
Just hours before, pro-separatist rebels had downed a Ukrainian military helicopter.
The incident left at least 12 dead, including a high-ranking Ukrainian general.
Mr Kerry acknowledges there are still danger signs.
"There's evidence of Russians crossing over, trained personnel from Chechnya trained in Russia who've come across to stir things up, to engage in fighting. We hope the Russians would actually engage more proactively in efforts to now try to de-escalate, take advantage of the election, build a road forward where Ukraine becomes a bridge between the West and the East."
But there has been no sign of Ukraine being a bridge.
In response to the news of the downing of the helicopter, Ukraine's Acting President told the parliament "a real war is going on in the east of our country."
He said that rebels used a portable air defence missile.
The incident happend over Slavyansk a city located 160 kilometres west of the Russian border.
Its self-declared pro-separatist Mayor Vyacheslav Ponomarev speaks calmly about the attack.
"The first helicopter was shot and our guys riddled it with bullets from machine guns. All aboard died, 14 soldiers and as far as I know one general, General Kulchytskiy, that's all that I know."
The Russian government denies the accusation that it is stirring up conflict in Ukraine.
It says it has no influence over the rebels.
In Washington, White House spokesman Jay Carney, without specificially mentioning Russia, expressed concern at the possible origin of the weaponry that brought down the helicopter.
And he also expressed concern that four elections Observers from the Organisation for Security and Co-operation in Europe are still being held by the rebels.
"Now, we cannot yet verify the details of these reports, but we are concerned that this indicates separatists continue to have access to advanced weaponry and other assistance from the outside. We are also concerned about the fact that a group of OSCE monitors is being held by separatists in Sloviansk. It is unacceptable for observers to be detained and they should be released immediately. We urge Russia to use its influence with these groups to get them to release the observers, disarm and participate in a political process, a process that the vast majority of Ukrainians actively participated in during the elections the other day."
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