Interior Minister Arsen Avakov has said Ukrainian forces and pro-Russian armed men have traded gunfire in a battle for control of the eastern town of Sloviansk, reports BBC.
Arsen Avakov said at least one Ukrainian officer was killed and both sides suffered casualties.
On Saturday Pro-Russian forces took over the town, prompting Kiev to launch an "anti-terror operation."
Kiev and Western powers accuse Moscow of inciting the trouble. The Kremlin denies the charge.
Checkpoints had been set up on the main roads into the town.
Avakov labelled the actions a "display of aggression by Russia."
Announcing the operation to clear the activists, he warned people to stay in their homes in Sloviansk.
"The separatists are shooting to kill without warning against the approaching special forces," Avakov said.