Slavyansk (Ukraine) (AFP) – Russian President Vladimir Putin denied involvement Monday with pro-Russian insurgents gaining ground in eastern Ukraine, but an unconvinced European Union expanded its sanctions on officials accused of trying to break up the ex-Soviet country.

Putin told U.S. President Barack Obama that Russia was not sponsoring the Kalashnikov-toting separatists who have seized a string of key state buildings in eastern Ukraine, and that “such speculations are based on unfounded information”, according to a Kremlin account of a phone call between the two leaders.

Ukraine’s Western-backed interim President Oleksandr Turchynov meanwhile sought a way out of the escalating crisis by proposing a referendum on greater autonomy for the country’s regions and seeking help from the United Nations.

Russia has deployed some 40,000 troops along Ukraine’s eastern border, a presence the U.S. and EU sought to counter by approving more than $2 billion in aid for Kiev’s embattled interim administration.

EU foreign ministers also announced they were expanding the list of 33 Ukrainian and Russian officials and business leaders hit by asset freezes and visa bans for their role in the Ukraine crisis — though the bloc stopped short of harsher measures ahead of a Geneva meeting of top EU, U.S., Russian and Ukrainian officials this week.

Underlining the danger of an escalation into military conflict, the U.S. said a Russian fighter jet had made several low-altitude passes near an American destroyer in the Black Sea at the weekend, branding the flyby “provocative and unprofessional”.

The White House meanwhile fended off Russian criticism of its own moves in the crisis, acknowledging that Central Intelligence Agency director John Brennan had visited Kiev at the weekend but insisting it was part of a routine trip and that claims to the contrary were “absurd”.

The pro-Kremlin militias who have seized state buildings in coordinated raids across eastern Ukraine only appeared to be gaining confidence while paying little heed to a “full-scale anti-terrorist operation” announced with much fanfare in Kiev.

Protesters armed with rocks and clubs smashed their way inside a police station in Gorlivka — a coal-mining town straddling a highway between the regional capital Donetsk and the city of Slavyansk to the north that is now effectively under militants’ control.

The unrestrained crowd whistled and cheered as they ripped away metal shields from the visibly frightened local force before raising the tricolor flag of the self-declared “People’s Republic of Donetsk”.

And Kalashnikov-wielding militants in Slavyansk — who are already in control of the local police station and security service office — also took command of its administration building before asking Putin to send in his troops.

“We ask President Putin to help us,” rebel leader Vyacheslav Ponomaryov told a group of reporters.

The spreading unrest is rooted in the deep mistrust in the big industrial cities along Ukraine’s Russian border of the new, nationalist government that enlisted Western support in toppling Kremlin-backed president Viktor Yanukovych in February.

Pro-Kremlin protesters in rundown regions such as Donetsk and Kharkiv are now seeking local referendums on either broader rights or an option to join the Russia.

Turchynov made a dramatic about-face aimed at defusing the tensions by backing a national poll on turning the centralized nation into a loose federation in which regions enjoy broader rights.

Washington has previously advised Kiev to devolve powers in order to remove any argument Putin might make about discrimination against Russian speakers — a charge that has fed fears Moscow’s annexation of Crimea last month was only the start of long-term Kremlin plans to dismember Ukraine.

“We are not against holding a national referendum,” Turchynov told lawmakers. “I am certain that a majority of Ukrainians will support an indivisible, independent, democratic and united Ukraine.”

The announcement stopped well short of meeting protesters’ calls for each Russian-speaking region to stage its own referendum, and it remains unclear how the militias — or Moscow — intend to respond.

The outcome of a national vote is uncertain because polls show most in Kiev and the Ukrainian-speaking west supporting a strongly unified state.

The Ukrainian leader’s office said Turchynov on Monday also asked UN Secretary General Ban Ki-moon for help “in conducting a joint anti-terrorist operation in the east” — a comment that hinted of hope in Kiev that the global body might send a peacekeeping mission into the flashpoint east.

There was no initial response from the UN, and Turchynov’s office failed to explain what precise help Ukraine was requesting.

The pro-Kremlin gunmen’s latest raids were especially unsettling for Kiev and Western leaders because of their remarkable similarity to events leading up to Russia’s annexation of Crimea.

The balaclava-clad gunmen were armed with special-issue assault rifles and scopes most often used by nations’ crack security troops. They also moved with military precision and cohesion.

But Russia has vehemently denied increasingly insistent U.S. and European charges of being behind the unrest, and Putin repeated that line Monday.

He urged Obama to “do everything possible to avoid the use of force and a bloodbath”, the Kremlin said.

There were no immediate readouts of their phone call from the White House, which earlier was the first to say it would take place.

Photo: Alexey Kravtsov via AFP