Ukraine crisis: Military claims 'Russian tanks have destroyed virtually every house' in Novosvitlivka

EU leaders are considering fresh sanctions against Russia

A military attache examines a Russian T-64BV tank displayed in Kiev on August 29, 2014. Russian weapons and artillery, seized by Ukrainian forces from pro-Russian separatists (AFP/Getty)

Russian tanks have "destroyed virtually every house" in the town of Novosvitlivka near Luhansk, Ukraine's military has said, as the EU considers fresh sanctions against Russia.

Andriy Lysenko, a spokesman for the national security council, told journalists in Kiev that Russian tanks had entered the small Ukrainian town of Novosvitlivka on the border with Russia and fired on every house.

"We have information that virtually every house has been destroyed," Mr Lysenko added, without giving details on when the reported attack took place.

On Saturday, government troops said forces had pulled out of areas to the east of the border-area city of Luhansk because of pressure from rebels.

Mr Lysenko said Ukrainian forces had been surrounded by rebels in the town of Ilovaysk, about 12 miles east of the largest rebel-held city of Donetsk, for days.

"We are surrendering this city," Mr Lysenko told reporters. "Our task now is to evacuate our military with the least possible losses in order to regroup."

Earlier, the EU foreign policy chief called on Russia to “withdraw its forces from Ukraine” and to stop the flow of arms and personnel into the country.

Catherine Ashton expressed “deep concern” over "direct aggression by Russian forces" after a ministerial meeting in Milan.

Her comments came as Ukraine’s president Petro Poroshenko said his country is subject to "military aggression and terror" with thousands of Russian troops and hundreds of tanks in eastern Ukraine.

Kiev and the West have accused Russia of assisting the rebels throughout the conflict, a claim Moscow has consistently denied.

At a news conference in Brussels ahead of a European Union summit, Mr Poroshenko called for a strong EU response to counter increasingly fierce resistance from separatist rebels.

He told the conference: "There is a very high risk not only for peace and stability for Ukraine but for the whole peace and stability of Europe."

Speaking after talks with Mr Poroshenko, the EU Commission President Jose Manuel Barroso warned "Russia should not underestimate the European Union's will and resolve to stand by its principles and values", as the 28-nation bloc prepares to consider new sanctions against Moscow.

The conflict has so far claimed over 2,600 lives in Donetsk and Luhansk.

"The opening of new fronts and the use of Russian regular forces (on Ukrainian soil) is not acceptable and represents a grave transgression," Mr Barroso added.

The United States and the EU have already imposed sanctions against Russian officials, several companies and the country's financial industry.