SLOVYANSK. Armed separatists in the eastern Ukrainian city of Slovyansk have seized a bus carrying international observers from the Organisation for Security and Cooperation in Europe (OSCE), Ukraine’s Interior Ministry has said.

The separatist leader in Slovyansk told reporters a problem had arisen when the observers tried to pass a separatist checkpoint, and that there was an Ukrainian "spy” among the group. He did not say where they were.

The interior ministry in Kiev said the group, which included eight OSCE representatives and five members of the Ukrainian armed forces, was being held in the building of the state security agency (SBU) in the city which has been occupied by pro-Russian separatists.

"Negotiations are going on for their release,” a ministry statement said.

Slovyansk, a city of around 130,000, has been for two weeks under the control of separatists who, like similar groups elsewhere in eastern Ukraine, oppose the central government in Kiev after the overthrow of a Kremlin-backed president.

Vyacheslav Ponomaryov, the de facto mayor of Slovyansk, told reporters he believed a problem had arisen when the OSCE observers arrived at a checkpoint on the edge of the city manned by separatist fighters, Reuters reported.

"What the situation was I do not know,” he said. "It was reported to me that among them (the OSCE group) was an employee of Kiev’s secret military staff.”

"People who come here as observers bringing with them a real spy: it’s not appropriate.”

The Vienna headquarters of the OSCE did not immediately confirm the information to AFP, but did say that all the observers in its main mission on the ground in Ukraine were accounted for.

Third world war

The alleged mass abduction of the monitors happened amid heightened tensions in Ukraine with Kiev accusing Moscow of trying to trigger a third world war even as its forces pushed to regain territory in the country’s east from pro-Russian separatists.

Ukrainian Prime Minister Arseniy Yatsenyuk accused Russia of trying to spark a global conflict.

"The world hasn’t forgotten the Second World War and Russia wants to start a third world war,” he said.

"Russia’s support for the terrorists in Ukraine constitutes an international crime and we call on the international community to unite against the Russian aggression.”

Ukraine’s military on Friday mounted a second phase of an aggressive operation to regain control of Slovyansk even as one of its helicopters was blown up after being hit with rocket fire at a base outside the city.

Officials in Kiev said a rocket-propelled grenade blew up the military helicopter sitting on the tarmac at a base near the eastern town of Kramatorsk. The cause of the explosion has not yet been verified.

Media reports from the Ukraine border said Slovyansk was still accessible despite claims it had been surrounded.

"We haven’t seen any sign of that yet on the ground. Based on what we have seen over the past ten days it seems they have had some false starts it is difficult for them to apply on the ground,” she said.