Comrades and Crimea's self-defense fighters carry the coffin of former paratrooper Alexander Gusev, 46, covered by Russian paratroopers flag, who was killed during clashes with Ukrainian troops in eastern Ukraine, during his funeral in Simferopol, Crimea, Friday, Aug. 29, 2014. (AP Photo)
Captured Russian paratroopers are seen in this image taken from video in Kiev on Wednesday Aug. 27. 2014. Ten Russian paratroopers were captured this week in Ukraine, adding to a growing body of evidence that Russia, despite its denials, is sending regular troops and weapons to support the separatists in their increasingly deadly fight against Ukrainian forces. (AP Photo/Channel 5) UKRAINE OUT TV OUT
BRUSSELS — European Union leaders on Saturday were poised to impose new sanctions against Russia as Ukraine's president warned the conflict with Moscow threatens peace and stability for Europe as a whole.
Ukraine's Petro Poroshenko said a strong EU response is needed because his country is subject to "military aggression and terror."
"Thousand(s) of the foreign troops and hundreds of the foreign tanks are now on the territory of Ukraine," Poroshenko told reporters, speaking in English. "There is a very high risk not only for peace and stability for Ukraine but for the whole peace and stability of Europe."
EU Commission President Jose Manuel Barroso said before a summit of the 28-nation EU's leaders in Brussels that "sanctions are not and end in themselves" but a means to dissuade Russia from further destabilizing Ukraine.
"Russia should not underestimate the European Union's will and resolve to stand by its principles and values," he told reporters, adding that the escalation seen over the past week cannot go unpunished.
"The opening of new fronts and the use of Russian regular forces (on Ukrainian soil) is not acceptable and represents a grave transgression," Barroso added.
NATO estimates that at least 1,000 Russian soldiers are in Ukraine even though Russia denies any military involvement in the fighting that has so far claimed 2,600 lives, according to U.N. figures.
Conceding ground in the face of a reinvigorated rebel offensive, Ukraine said Saturday that it was abandoning a city where its forces have been surrounded by rebels for days. It was also pulling back from another it had claimed to have taken control of two weeks earlier.
The statements by Col. Andriy Lysenko, a spokesman for the national security council, indicate that Ukrainian forces are facing increasingly strong resistance from Russian-backed separatist rebels just weeks after racking up significant gains and forcing rebels out of much of the territory they had held.
Poroshenko, who was meeting with EU leaders later Saturday, said Ukraine would welcome an EU decision to help with military equipment and further intelligence-sharing.
Barroso provided no specifics about which sanctions the heads of state and government might adopt to inflict more economic pain to nudge Russia toward a political solution. "No one's interest is served by new wars on our continent," Barroso said.
The EU leaders were likely make a political decision Saturday, with the exact targets of sanctions to be divulged by the EU executive in the coming days.
The United States and the EU have so far imposed sanctions against dozens of Russian officials, several companies and the country's financial industry. Moscow has retaliated by banning food imports.
New EU sanctions have to be agreed unanimously — a requirement that has in the past blocked or softened decisions since some nations fear the economic fallout. Russia is the EU's third-largest trading partner and one of its biggest oil and gas suppliers.
Barroso said that the EU — a bloc encompassing half a billion people and stretching from Lisbon to the border with Ukraine — stands ready to grant Kiev further financial assistance if needed. The bloc will also organize a donors' conference to help rebuild the country's east at the end of the year, he added.
On the ground, fighting continued.
Ukrainian forces had been surrounded by rebels in the town of Ilovaysk, avout 20 kilometers (15 miles) east of the largest rebel-held city of Donetsk for days.
"We are surrendering this city," Ukraine's Lysenko told reporters. "Our task now is to evacuate our military with the least possible losses in order to regroup."
Lysenko said that regular units of the military had been ordered to retreat from Novosvitlivka and Khryashchuvate, two towns on the main road between the Russian border and Luhansk, the second-largest rebel-held city. Ukraine had claimed control of Novosvitlivka earlier in August.
Separately, Ukrainian forces said one of their Su-25 fighter jets was shot down Friday over eastern Ukraine by a missile from a Russian missile launcher. The pilot ejected and was uninjured, the military said in a brief statement.
Heintz reported from Kiev; Nataliya Vasilyeva in Moscow contributed reporting.
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