People take part in a pro-Ukrainian rally in Luhansk, eastern Ukraine, yesterday. Photo: Reuters/Vasily Fedosenko

Leaders of the Group of Seven major economies agreed to impose more sanctions on Russia over the crisis in Ukraine, where armed pro-Moscow separatists have detained a group of international observers they accuse of being Nato spies.

The pro-Western Kiev government said a Russian special forces operative was behind what it called a kidnapping in the eastern city of Slaviansk that is under the separatists’ control, and said the detainees were being used as a “human shield”.

Ukraine’s state security service said the observers for the Organisation for Security and Cooperation in Europe (OSCE) were being held “in inhuman conditions in the basement of the terrorists’ headquarters,” and that one needed medical help.

“Russian authorities never condemned these terrorists and this is the clear sign that the Russian regime supports these gangsters,” Ukrainian Prime Minister Arseny Yatseniuk said.

Russia denies it is to blame for the crisis in eastern Ukraine, where armed pro-Russian separatists have taken control of about a dozen official buildings.

The Russian Foreign Ministry said it was working to resolve the observer crisis, which it blamed on Kiev for failing to ensure the mission’s safety in “areas where the authorities do not control the situation and where a military operation against residents of their own country has been unleashed”.

The observers, including nationals from Germany, Sweden, Denmark, Poland and the Czech Republic, along with several Ukrainian army officers accompanying them on the German-led monitoring mission, were seized on Friday.

Russia’s envoy to the Vienna-based OSCE said Moscow would take all steps to free them, Russian media reported.

The separatists invited Russian journalists yesterday into a local security building they have seized and showed military identification cards they said proved the detainees were spying for Nato, according to reports in Russian media.

It is standard practice for serving military officers to be seconded to OSCE missions.

The Ukraine crisis has brought relations between Russia and the West to their lowest ebb

One of the separatists, Yevgeny Gorbik, told reporters: “We are urgently checking their activities, where they were and what they were doing.”

Asked what would happen to the detainees, he said: “I don’t know. It’s not up to me to decide. Those at the top will decide.”

German Defence Minister Ursula von der Leyen said: “I urge everyone with responsibility and influence in Ukraine and Russia to urgently do everything and use all their influence to ensure the observers are released immediately and safely.”

German Foreign Minister Frank-Walter Steinmeier discussed the Ukraine situation with his Russian counterpart Sergei Lavrov by telephone yesterday “with an accent on possible steps to de-escalate the situation,” the Russian Ministry said.

The OSCE has dispatched a negotiating team to the region to try to secure the observers’ release, a German government source said.

The Ukraine crisis has brought relations between Russia and the West to their lowest ebb since the Cold War, and is increasingly turning into a military stand-off.

Russia has massed troops and helicopters on the border with Ukraine, while Nato has deployed extra forces in eastern Europe, saying they are needed to reassure its allies.

Yatseniuk said Russian military aircraft entered Ukrainian airspace seven times overnight.

“The only reason is to provoke Ukraine... and to accuse Ukraine of waging war against Russia,” the Prime Minister told reporters before cutting short a visit to Rome.

Washington deployed 150 paratroopers to Lithuania yesterday. A total of 600 US troops have now arrived in Poland and the former Soviet Baltic states.