Tensions, Violence Continue to Rise in Eastern Ukraine

Pro-Russia separatists armed with baseball bats attacked a rally in support of Ukrainian unity in the eastern city of Donetsk on Monday.

A number of people sustained injuries, many of them head wounds after dozens of men dressed in military fatigues tried to disrupt the rally with baseball bats, firecrackers and what appeared to be at least one stun grenade.

Protesters, estimated at about 2,000, waved Ukrainian flags and chanted “Donetsk is Ukraine!” and “Putin No!”. They quickly dispersed after the violence.

In another eastern city, Luhansk, near the Russian border, crowds cheered as one group of activists declared the area an independent state. One of the leaders of the self-proclaimed "Luhansk People's Republic" called on Russia to help it defend its sovereignty.

Earlier on Monday, pro-Russia militants also took another town, seizing the police headquarters and municipal administration building in Kostyantynivka, Donetsk region.

About 20 well-organized gunmen were seen controlling the administration building. They erected a barricade of tires, sandbags and concrete blocks.

Soviet songs played over loudspeakers as women gathered the signatures of people supporting an uprising for independence and possible rule from Moscow.

Mayor shot

The mayor of Ukraine's second-largest city, Kharkiv, was in a serious condition on Monday after being shot in the back while riding his bicycle, in the latest violence to strike the eastern part of the country.

Hennady Kernes, 54, traditionally aligned with Russia, was riding along the route he takes almost every day when he was shot, probably by someone hidden in nearby woods, said Iryna Kushchenko, spokeswoman for the local government.

His bodyguards were following in a car but were not close enough to intervene, she said.

The Interior Ministry said Kernes had been taken to the city's hospital for emergency treatment.

“Doctors assess his condition as serious,” the ministry said in a statement.

Kernes was accused by Ukraine's new pro-Western leaders two months ago of promoting separatism when pro-Russian protesters took control of local administrative buildings. He has since softened his stance.

Ukraine's deputy interior minister, Serhiy Yarovy, said investigators are even looking into whether the shooting was in retaliation for the detention in Kharkiv of 13 pro-Russian separatists on Sunday on charges of possession of Molotov cocktails, explosives and nails.

Ukrainian forces evicted pro-Russia activists this month, making Kharkiv the only major eastern city to have taken back control from armed protesters who have demanded a referendum on independence for most of eastern Ukraine.

New US, EU sanctions

President Barack Obama announced new sanctions on Monday against Russia for its involvement in the crisis in Ukraine.

The measures are in response to “Russia’s continued illegal intervention in Ukraine and provocative acts that undermine Ukraine’s democracy and threaten its peace, security, stability, sovereignty, and territorial integrity,” said a White House statement, adding that Moscow's involvement in eastern Ukraine violence "is indisputable."

The White House said the targeted sanctions are aimed at a number of individuals and entities and will restrict licenses for certain U.S. exports to Russia.

"The Department of the Treasury is imposing sanctions on seven Russian government officials, including two members of President Putin’s inner circle, who will be subject to an asset freeze and a U.S. visa ban, and 17 companies linked to Putin’s inner circle, which will be subject to an asset freeze," the statement said.

A senior Russian diplomat decisively condemned the new round of U.S. sanctions. Deputy Foreign Minister Sergei Ryabkov said on the ministry's website that the sanctions marked a return to "Cold War" practices.

Separately, the European Union imposed asset freezes and visa bans on 15 more Russians and Ukrainians on Monday.

The decision brings to 48 the number of people that the EU has put under sanctions for, it says, helping undermine Ukraine's territorial integrity.

The names of those to be added to the list will not be made public until they are published in the EU's Official Journal on Tuesday.

Russian, US Defense Chiefs Talk

Also on Monday, U.S. Defense Secretary Chuck Hagel and Russian Defense Minster Sergei Shoigu held a "candid" hour-long telephone conversation.

Hagel repeated his call for an end to Russia's destabilizing influence inside Ukraine and warned that continued aggression would further isolate Russia and result in more diplomatic and economic pressure.

Russia's defense minister expressed concern about what he called an unprecedented increase in U.S. and NATO military activity near Russia's borders and urged Hagel to help "turn down the rhetoric" over the Ukraine crisis.

Shoigu told Hagel that Russian forces, which had further alarmed the West by starting drills near the border last week after Ukraine launched an operation against the separatists, had since returned to their permanent positions, the ministry said.

But it gave no indication of whether the overall number of Russian troops deployed near the Ukrainian border, which NATO has put at about 40,000, along with tanks, aircraft and other equipment, had been reduced.

During the conversation Hagel went on to ask Shoigu for Russia's assistance in securing the release of the seven inspectors from the Organization for Security and Cooperation in Europe (OSCE) currently being held in eastern Ukraine.

OSCE monitors

Earlier, Russian Foreign Minister Sergei Lavrov and his German counterpart Frank-Walter Steinmeier discussed the detention of the OSCE observers, according to the Russian Foreign Ministry.

The ministry gave no further details of the call, which it said was a German initiative.

Germany urged Moscow to use its influence on pro-Russian separatists in eastern Ukraine to secure the release of observers who are being held in the city of Slovyansk.

The OSCE monitors appeared in public with armed rebels watching Sunday to give assurances they are not being mistreated. The leader of the monitors, German Colonel Axel Schneider, assured reporters in Slovyansk they were in good health.

The insurgents called the military observers "prisoners of war."

The OSCE sent a team of negotiators to eastern Ukraine to meet with the self-proclaimed mayor of Slovyansk, Vyacheslav Ponomaryov, about freeing the military monitors. One, a Swede who is diabetic, was freed for medical reasons but four Germans, a Czech, a Dane and a Pole are still being held.

The rebels also displayed three bloodied and blindfolded officers from Ukraine's security service that they captured. The officers were shown with heads bowed, stripped of their pants and shoes.

U.N. Secretary-General Ban Ki-moon on Monday condemned the seizure of the OSCE monitors and Ukrainians captured with them, demanding their immediate release, according to a statement by his office.

Ukraine reports losses

Ukraine has lost at least $80 billion since Russia annexed its southern Crimea region and the price tag, Kyiv says, will be much higher when the calculation includes lost profits and the value of possible energy reserves in the Black Sea.

Justice Minister Pavlo Petrenko said Kyiv would press its case against Russia at the European Court of Human Rights and could take individuals to court for military crimes and those against its territorial integrity.

“Any state property located on the territory of Crimea is the property of Ukraine and Russia bears the full liability for the losses incurred by state companies, ministries and departments,” Petrenko told a news conference.

“These losses do not include lost profits and the value of minerals,” added Petrenko.

Analysts estimate the value of such energy reserves, seen at 165.3 billion cubic meters of gas and 44 million tons of oil, at around $800 million to $1.2 billion.

Some reporting by Reuters