Ukraine’s government said Russian forces may have shot down one of its military airplanes to bolster the Kremlin-backed insurgency amid a European push for peace talks that Germany expects to inch forward today.

An An-26 transport plane was shot down in eastern Ukraine yesterday by a “powerful weapon” not previously used by the separatists, probably from inside Russia, Defense Minister Valeriy Geletey told President Petro Poroshenko, according to the president’s website. The plane was hit at 6,500 meters, an altitude shoulder-fired missiles can’t reach, he said.

Ukrainian forces are trying to encircle and wipe out insurgents who retreated to the mainly Russian-speaking cities of Luhansk and Donetsk last week, as well as stop the flow of weapons and fighters across the country’s 2,000 kilometer (1,200 mile) eastern border. At the same time, the U.S. is pushing for deeper sanctions, possibly against entire industries in the Russian economy, to stop the country from assisting the separatists and destabilizing Ukraine.

“Ukraine, as never before, is on the brink of wide-scale aggression from our neighbor,” Mykhaylo Koval, deputy head of Ukraine’s National Defense and Security Council, said late last night.

Officials from Ukraine, Russia and the Organization for Security and Cooperation in Europe agreed to hold a video call today with rebel representatives that should pave the way for face-to-face talks, Germany’s government said yesterday.

The downed plane was probably struck either by an air-to- air missile from a jet based at Russia’s Millerovo base or a surface-to-air rocket from a mobile system, Andriy Lysenko, a Defense Ministry spokesman, said in Kiev yesterday.

Ukrainian forces are still searching for six people from the aircraft, while two have been captured by pro-Russian rebels, military spokesman Vladyslav Seleznyov said on Channel 5. Igor Konashenkov, a spokesman for Russia’s Defense Ministry, couldn’t be reached for comment on his mobile phone.

Separatists fired on a residential area in Luhansk yesterday evening, destroying a cafe, a market and private houses, the Interior Ministry in Kiev said in a statement. The city announced a three-day morning period after 17 civilians died, including at least one child, and 73 were wounded during the past three days, the mayor’s office said in a statement.

Poroshenko spoke with German Chancellor Angela Merkel at around midnight last night and agreed OSCE monitors would be placed at two border checkpoints and drones may be used to observe the frontier, his office said in a statement.

OSCE Chairperson-in-Office Didier Burkhalter also phoned with Ukrainian Foreign Minister Pavlo Klimkin and Russian Foreign Minister Sergei Lavrov, stressing the importance and urgency of talks with leaders of “illegally armed groups in the eastern region of Ukraine” to prepare the ground for cease-fire efforts, the OSCE said in a statement on its website.

Russia said some OSCE delegations weren’t being constructive and that the U.K. was pushing anti-Russian “hysteria” in the organization. The Defense Ministry in Moscow invited military attaches from 18 countries, including the U.S. and Germany, to see the area around the Russian-Ukrainian border in Rostov region, RIA Novosti reported, citing Deputy Defense Minister Anatoly Antonov.

The U.S. pressed EU ambassadors for their countries to expand sanctions against Russia at a meeting yesterday to halt what American officials called Russian President Vladimir Putin’s destabilizing actions, according to three participants.

“While Russia says it seeks peace, its actions do not match its rhetoric,” The U.S. government said in a statement.

The U.S. may target financial institutions and the defense sector to pinch Russia’s economy — with or without its European allies — U.S. officials said, and measures could be imposed as soon as this week. The meeting participants and U.S. officials all spoke on condition of anonymity.

The yield on Ukraine’s April 2023 dollar bonds was little changed at 8.39 percent at 9:44 a.m. Russia’s Micex Index fell 0.4 percent to 1,477.12, its second decline in as many days, while the ruble weakened 0.1 percent against the central bank’s target euro-dollar basket.

The EU has imposed asset freezes and visa bans on 72 people and two companies connected with the destabilization of Ukraine and Russia’s annexation of Crimea in March, measures that advocates of stricter sanctions say are symbolic gestures.

The EU’s first opportunity to consider wider penalties will be at a summit tomorrow. Objections by countries such as Italy, Austria, Slovakia, France and Greece have frustrated moves toward broader sanctions, which require unanimity.

While it withdrew about 40,000 troops to the frontier after the ouster of Kremlin-backed President Viktor Yanukovych in February, Russia has moved about 10,000 to 12,000 troops back, Reuters cited an unidentified NATO officer as saying.

“The developments of recent days show the Russian side has taken a course of escalation,” Lysenko said.

Lysenko dismissed Russian claims that Ukraine’s military fired the artillery round that killed one person in the Russian region of Rostov last week. Ukraine also has proof that its border guards were attacked from Russian territory and that Russian helicopters and drones crossed over the border, he said.

“Pro-Russian militants used mortar fire and killed one Russian citizen,” Lysenko said. “Now Russia is trying to present the shooting as an attack from the Ukrainian army. Those accusations are groundless.”

Russian officials said Ukrainian forces fired at least seven shells into Russia two days ago, prompting some media in Moscow to report that Russia was planning military strikes in retaliation. Putin’s spokesman, Dmitry Peskov, called those assertions “nonsense.”

Earlier, Russian Deputy Foreign Minister Grigory Karasin told state television that the shelling “won’t go unanswered.”