By Nick Paton Walsh, Laura Smith-Spark and Victoria Butenko
SLAVYANSK, Ukraine (CNN) -- Two helicopters were brought down in the flashpoint city of Slavyansk on Friday, Ukraine's Defense Ministry said, as Ukrainian security forces launched their most intensive effort yet to try to dislodge pro-Russian separatists.
Residents of Slavyansk were warned to stay home and avoid windows as the latest phase of the authorities' "anti-terrorist operation" got under way.
Conflicting reports are emerging, but it appears the operation has already claimed its first casualties.
Two Mi24 helicopters have been taken down with mobile air defense systems, killing two military officers and injuring others, according to the Ukrainian Defense Ministry website. Another army helicopter, an Mi8, was damaged but no one was hurt, it said.
Militants 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.
"The terrorists opened fire at Ukrainian units with some heavy guns, including grenade launchers and portable air defense systems," Interior Minister Arsen Avakov said in a post on his official Facebook page.
Russian state news agency RIA Novosti earlier reported that one Russian separatist was killed and another wounded in Slavyansk.
The self-declared mayor of Slavyansk, Vyacheslav Ponomaryov, said his city was under attack in a video statement published by local media and posted to YouTube.
"We are being stormed, we have got casualties. I'm asking children, women and the elderly not to leave their homes and I ask armed men to provide us all the assistance they can," he said.
"I think we will be able to successfully stand up for our city. Thank you for your attention, thank you for your assistance, we will win."
The operation, also targeting the town of Kramatorsk, appears to be the most significant yet by the Ukrainian military against pro-Russian militia groups that have taken effective control of swaths of eastern Ukraine.
Russian President Vladimir Putin condemned the operation "as a criminal act" Friday, Kremlin spokesman Dmitry Peskov said, according to Russian state news agency ITAR-Tass.
Peskov also accused Kiev of fatally undermining an international deal agreed to last month in Geneva, Switzerland, which called for illegal militia groups to disarm and vacate seized buildings.
Peskov said that while Russia is working to de-escalate the conflict, Kiev authorities "have started shelling peaceful settlements from warplanes, have started a punitive operation, actually ruining the last hope for viability of the Geneva accords," the news agency reported.
Peskov also said that Russia was unable to get in touch with a special presidential envoy, Vladimir Lukin, in southeastern Ukraine. Lukin was sent there Thursday to negotiate a possible release of foreign military observers, he said.
Pro-Russian activists in Slavyansk have held a team of Western observers from the Organization for Security and Co-operation in Europe captive for the past week.
Russian news agency Interfax reported that Lukin was fine and not in danger.
Human shield allegation
In his Facebook post, Avakov said nine checkpoints that were under control of pro-Russian separatists in Slavyansk have been taken back by Ukrainian forces, who now encircle the town.
The operation is being conducted by the Interior Ministry, the national guard and the army, he said.
Avakov urged residents not to go outside and to be careful at windows while the operation continues. The separatists are hiding among the civilian population and "shoot from the windows of residential apartments," he said, aware that the Ukrainian forces have been told not to fire toward homes.
Ukraine's security service, the SBU, also accused separatist leaders of ordering activists to use residents as human shields in the city and at checkpoints.
The service said the downing of a military helicopter indicated that those shooting were "highly professional foreign military, rather than peaceful residents with hunting guns, as the Russian leadership says."
A CNN team north of Slavyansk saw Ukrainian military units on the road, and heard the sound of two explosions that may have been rocket-propelled grenades.
As part of efforts to isolate the town, trains will be blocked and road traffic is being kept to a minimum, Avakov said.
What the Ukrainian authorities want from the separatists has not changed, he said -- release the hostages, turn in weapons, vacate seized administrative buildings and allow the normal functioning of the city.
Previous phases of the "anti-terror operation" by the Ukrainian forces have not resulted in any significant gains, despite official claims of success.
On Thursday, pro-Russian activists and Ukrainian riot police clashed at the prosecutor's office in the eastern city of Donetsk as simmering tensions escalated into violence.
At least one police officer was injured as the separatists seized control, the Ukrainian Interior Ministry said, adding that shots were fired and small grenades and stones were used in the attack.
The regional health authority said 26 people were injured, four of them with gunshot wounds.
Earlier in the day, crowds marched through Donetsk, demanding greater autonomy for the restive eastern region.
Many in the region view the interim government in Kiev as a "junta" that seized power thanks to backing from ultranationalist groups, and they are angered by its actions.
Separatist leaders want to hold a referendum on May 11 on Ukraine becoming a federal state.
Eastern Ukraine was a heartland of support for pro-Moscow President Viktor Yanukovych, ousted in February after months of protests by people upset that he had turned away from Europe in favor of Moscow.
The crisis has sparked deep divisions in Ukraine. Many also want to see the country remain united, but unhappiness about government corruption and ineffectiveness runs deep.
The interim government has said it'll look at constitutional reforms ahead of national elections due on May 25.
IMF approves $17.1 billion bailout
Acting Ukrainian President Oleksandr Turchynov acknowledged this week that the central government has effectively lost control of the country's Donetsk and Luhansk regions to the pro-Russian separatists.
He signed a decree introducing military conscription Thursday in a bid to beef up Ukraine's military, citing "real and potential threats to Ukraine."
Besides the threat from pro-Russian separatists, NATO estimates that Russia has some 40,000 troops massed near Ukraine's border.
In a key sign of international support for the Kiev authorities, the International Monetary Fund approved a $17.1 billion bailout for Ukraine on Thursday.
The bailout, which is conditional on reforms, should also unlock $15 billion in additional international funding, IMF chief Christine Lagarde told CNN's Christiane Amanpour.
Lagarde also said that "clearly there have been consequences" for the Russian economy as a result of its intervention in Ukraine.
Russia annexed Ukraine's southeastern Crimea region in March after a controversial referendum. Its actions have prompted fears that it may seek also to intervene directly in eastern Ukraine, which has a large Russian-speaking population.
CNN's Nick Paton Walsh reported from Slavyansk and Victoria Butenko from Kiev, while Laura Smith-Spark wrote and reported from London. CNN's Arwa Damon in Donetsk and Claudia Rebaza in Kiev contributed to this report. CNN's Boriana Milanova also contributed.
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