By ALEXANDER ROSLYAKOV and JIM HEINTZ
Associated Press KAMENSK-SHAKHTINSKY, Russia (AP) - NATO and Ukraine said Russian military vehicles did cross into Ukraine during the night and the Ukrainian president said most of them were destroyed by his troops.
A statement on President Petro Poroshenko's website said that he and British Prime Minister David Cameron spoke by telephone about the reports from some Western journalists that Russian APCs were seen crossing into Ukraine near the point where a Russian aid convoy was parked.
"The president informed that the given information was trustworthy and confirmed because the majority of the machines had been eliminated by Ukrainian artillery at night," the statement said.
Poroshenko did not include any proof for his statement.
NATO secretary-general Anders Fogh Rasmussen said the alliance had observed a Russian "incursion" into Ukraine.
"What we have seen last night is the continuation of what we have seen for some time," he said during a visit to Copenhagen.
Britain said it summoned Ambassador Alexander Yakovenko to clarify the reports of the Russian military invasion.
Following reports that Ukrainian forces had engaged with Russia forces inside Ukraine, markets sold off heavily. Germany's DAX, for example, which had been trading over 1 percent higher, ended the day 1.4 percent lower. The benchmark price of oil was up over $1 to $96.70 per barrel.
"Traders will be anxiously scanning their newsfeeds for any sign of a Russian response over the coming hours," said Chris Beauchamp, market analyst at IG.
Earlier, Russia let Ukrainian officials inspect an aid convoy while it was still on Russian soil Friday and agreed that the Red Cross can distribute the goods in Ukraine's rebel-held city of Luhansk. The twin moves aimed to dispel Ukrainian fears that the operation was a ruse to get military help to the pro-Russian separatists.
Russia had sent the convoy of roughly 200 aid trucks toward a border crossing under the control of pro-Russia separatists in eastern Ukraine, raising the prospect that it could enter without being inspected by Ukraine or the Red Cross.
Ukraine had vowed to use all means necessary to block the convoy in such a scenario, leading to fears of an escalation in the fighting that has ravaged eastern Ukraine since April.
Amid the tensions, AP reporters saw dozens of Russian military trucks and armored personnel carriers moving Friday around the area where the trucks were parked, about 28 kilometers (17 miles) from the border in a Russian field.
Russia said that Russian forces were patrolling the border but denied that military vehicles had crossed into Ukraine.
The fighting in eastern Ukraine has claimed nearly 2,100 lives, half of those in the last few weeks. It began in April, a month after Putin annexed Ukraine's Black Sea peninsula of Crimea.
Heintz reported from Kiev. Peter Leonard in Kiev, Ukraine, Vitnija Saldava in Lysychansk, Ukraine; Lynn Berry and Vladimir Isachenkov in Moscow, Karl Ritter in Stockholm and Geir Moulson in Berlin contributed to this report.