Dozens killed as fighting spreads in Ukraine

Slavyansk, Ukraine; A team of international military observers seized by pro-Russian separatists in eastern Ukraine was freed Saturday as Kiev resumed military action to tackle the pro-Moscow gunmen who have overrun the region.

Separatists abducted eight Western observers for watchdog Organization for Security and Cooperation in Europe in the flashpoint city of Slavyansk on April 25. They were seized alongside five Ukrainians; one of the observers was later released for medical reasons.

The self declared mayor of Slavyansk, Vyacheslav Ponomarev, confirmed the release of the remaining 12 members of the OSCE, adding Russian envoy Vladimir Lukin, who arrived in eastern Ukraine on Friday, had helped negotiate their release.

An OSCE delegation waited to collect the observers at a checkpoint on the outskirts of the town, he said, adding there had been no prisoner exchange.

"Right now we are expecting another storming of the town," Ponomarev told CNN.

The OSCE also confirmed the release in a tweet.

British Foreign Secretary William Hague welcomed the news in a tweet, adding "all other hostages held by illegal armed groups should be released."

Military operations

The news came as Ukraine's government resumed military action to tackle pro-Russian separatists in the east, where violence flared on Friday.

Pro-Russian separatists downed two helicopters in the volatile region while clashes in the southern port city of Odessa sparked a fire that killed dozens, raising the question of whether the country can stave off a possible civil war.

The violence pit pro-Russian separatists against Ukrainian forces and those who support the government in Kiev. It prompted a meeting of the U.N. Security Council, with Russia demanding an end to what it called Ukrainian aggression and Western powers accusing Moscow of funding the violence.

Security forces launched their most intensive effort yet on Friday to try to dislodge the separatists who have reportedly seized government buildings in nearly a dozen cities and towns.

On Saturday, Kiev's government confirmed a second day of military operations in the east.

Interior Minister Arsen Avakov said the "active phase of the operation" would resume at dawn, with Ukrainian forces taking a television tower in Kramatorsk, some 16 kms (10 miles) from Slavyansk.

"We are not stopping," Avakov wrote on his Facebook page.

Residents were warned to stay indoors and off the streets.

"Fighting in Kramatorsk," Avakov later posted on his Facebook account, adding Ukrainian "special units were instructed to stop the provocation."

A CNN team on the outskirts of the city saw troop carriers moving toward the city center. Local residents described hearing gunfire in certain neighborhoods.

Helicopters downed

In Slavyansk on Friday, two Ukrainian government helicopters were shot down. The helicopters were brought down by fire from pro-Russian separatists, Kiev's defense ministry said.

Five pro-Russian separatists and two civilians were killed in the city in a Ukrainian military operation, Ponomaryov said.

Two Ukrainian soldiers were killed during an attack in the village of Andriyivka, near Slavyansk, the defense ministry said. The gunmen also blocked a bridge in the area, using local residents, including women, as shields, according to the ministry.

Hundreds of miles away in Odessa, 46 people died following a fire that started at a trade union building amid clashes, a spokesperson for the local prosecutor's office told CNN.

"We have identified very few bodies but they were all local residents," the spokesperson said.

Video posted on YouTube appeared to show supporters of Kiev throwing Molotov cocktails at the building where pro-Russian separatists had reportedly taken up positions. The footage, which CNN could not independently confirm, showed people sitting on ledges trying to escape the fire and thick smoke.

Kiev's interior ministry said authorities had started three criminal investigations into the events.

"Police have detained 160 people who were most likely 'active participants during the incidents'," the ministry said on its website.

U.S. President Barack Obama and German Chancellor Angela Merkel pledged on Friday to seek harsher sanctions against Russia if Ukraine doesn't stabilize in time for elections this month. But the threat seemed to do little to waive off Moscow, with its foreign ministry saying Ukraine's use of its military in Slavyansk is criminal.

Russia and the West squared off diplomatically over the fate of Ukraine after Moscow annexed the Black Sea peninsula of Crimea in March following the ouster of Ukrainian President Viktor Yanukovych. He was pushed from office after months of protests by people upset that he had turned away from Europe in favor of Moscow.

'Nail in the coffin'

Russian President Vladimir Putin's spokesman, Dmitry Peskov, told CNN the military operation was "the last nail in the coffin" for the deal agreed to last month in Geneva, Switzerland, which called for illegal militia groups in eastern Ukraine to disarm and vacate seized buildings.

Slavyansk residents were warned on Friday to stay home and avoid windows as the latest phase of the authorities' "anti-terrorist operation" got under way.

The two Mi24 helicopters were downed with mobile air defense systems, killing two military officers and injuring others, according to a statement on Kiev's defense ministry's website. Another army helicopter, an Mi8, was damaged, but no one was hurt, it said.

Pro-Russian separatists took one badly injured pilot hostage after his helicopter was forced to make an emergency landing, the ministry said, and efforts to free him are ongoing.

Ukraine's security service, the SBU, said one helicopter that came under attack was carrying medics, one of whom was injured.