Ukraine prepares armed response as city seized by pro-Russia forces
* Armed men seize more buildings, roads in eastern Ukraine
* Kiev condemns 'act of aggression' from Russia
* Crisis mounts after Russia's seizure of Crimea region
* Russia-Ukraine gas dispute may threaten Europe's supply
ARMED separatists took virtual control of a city in eastern Ukraine today and Kiev prepared troops to deal with what it called an "act of aggression by Russia".
Pro-Russian activists carrying automatic weapons seized government buildings in Slaviansk and set up barricades on the outskirts of the city. Official buildings in several neighbouring towns were also attacked.
The developments have increased concerns of a possible "gas war" that could disrupt energy supplies across the continent.
"The Ukrainian authorities consider the events of the day as a display of external aggression from Russia," Interior Minister Arsen Avakov said in a statement.
"Units of the interior and defence ministries are implementing an operational response plan," he added.
Russia and Ukraine have been in confrontation since protests in Kiev forced the Moscow-backed president from office, and the Kremlin sent troops to annex Crimea, the home of its Black Sea Fleet and a part of Russia until 1954.
Moscow denies any plan to send in forces or split Ukraine, but the Western-leaning authorities in Kiev believe Russia is trying to create a pretext to interfere again. NATO says Russian armed forces are massing on Ukraine's eastern border, while Moscow says they are on normal manoeuvres.
At least 20 men armed with pistols and rifles took over the police station and a security services headquarters in Slaviansk, a city of over 100,000 people about 150 km (90 miles) from the border with Russia.
Officials said the men had seized hundreds of pistols from arsenals in the buildings. The militants replaced the Ukrainian flag on one of the buildings with the red, white and blue Russian flag.
Washington backed Kiev's assessment that Moscow was responsible. "Worrisome violence in ... Ukraine today. Russia again seems to be behind it," State Department spokeswoman Jen Psaki said on Twitter.
ROADBLOCKS AROUND CITY
On a road leading into Slaviansk, other members of the group, armed with automatic rifles, set up a roadblock and checked vehicles entering the city, a Reuters reporter said.
There was no sign of any Ukrainian law enforcement officials in the city.
Ukraine's Western-backed government warned of tough action if the militants did not lay down their weapons, but it was unclear if the local law enforcement agencies were taking orders from Kiev any more after the local police chief quit.
Kostyantyn Pozhydayev came out to speak to pro-Russian protesters at his offices in the regional capital, Donetsk, and told them he was stepping down "in accordance with your demands". Some of his officers left the building.
The protesters occupied the ground floor of the Donetsk police headquarters and a black and orange flag adopted by pro-Russian separatists flew over the building in place of the Ukrainian flag.
The occupations are a potential flashpoint because if protesters are killed or hurt by Ukrainian forces, that could prompt the Kremlin to intervene to protect the local Russian-speaking population, a repeat of the scenario in Crimea.
Oleksandr Turchynov, the acting Ukrainian president, called an emergency meeting of the national security council for Saturday evening to discuss the unrest in the east.
Ukraine's acting foreign minister, Andriy Deshchytsia, said he had spoken by telephone with Russian Foreign Minister Sergei Lavrov and demanded Moscow stop what he called "provocative actions" by its agents in eastern Ukraine.
Lavrov, in a statement issued by his ministry, said there were no Russian agents in the region and that it would be "unacceptable" if Ukrainian authorities were to order the storming of the buildings.
Ukrainian commentator Sergei Leshchenko said the burst of activity by pro-Russian groups was an attempt by the Kremlin to give it a strong negotiating position before international talks about Ukraine in Geneva next Thursday.
Russia is expected to argue at the talks for a revamp of Ukraine's constitution to give a large degree of autonomy to eastern Ukraine, something Kiev and its Western backers reject.
"Russia will come to the talks with the position that 'Donetsk and several neighbouring regions are already ours - now let's talk about federalisation'," said Leshchenko, a commentator with the Ukrainska Pravda newspaper.
With the crisis in Ukraine still unresolved, the gas dispute threatens to affect millions of people across Europe.
A large proportion of the natural gas that EU states buy from Russia is pumped via Ukrainian territory, so if Russia makes good on a threat to cut off Ukraine for non-payment of its bills, customers further west will have supplies disrupted.
Russia is demanding Kiev pay a much higher price for its gas, and settle unpaid bills. Russian state-owned gas giant Gazprom and its Ukrainian counterpart, Naftogaz, are in talks, but the chances of an agreement are slim.
"I would say we are coming nearer to a solution of the situation, but one in the direction that is bad for Ukraine," Ukrainian Energy Minister Yuri Prodan said in an interview with the German newspaper Boersenzeitung
"We are probably steering towards Russia turning off its gas provision," he was quoted as saying.
That raised the spectre of a repeat of past "gas wars", when Ukraine's gas was cut off with a knock-on effect on supplies to EU states.
The scope for compromise narrowed after the Naftogaz chief executive told a Ukrainian newspaper that Kiev was suspending payments to Gazprom pending a conclusion of talks on a new deal.
Ukraine has de facto stopped payments already because it failed to make an instalment of over $500 million due this month to Russian state gas giant Gazprom.
Moscow says it does not want to turn off Ukraine's gas if it can be avoided, and that it will honour all commitments to supply its EU customers.