Petro Poroshenko has called an emergency meeting of his security and defence council after an assault by pro-Russian forces on a strategically-important town on Ukraine's south-east coast.
Nato says at least 1,000 Russian troops have entered Ukraine and have been in direct "contact" with Ukrainian soldiers leaving some injured.
"Russian forces have entered Ukraine," said Mr Poroshenko.
"Today the president's place is in Kiev," he continued as he cancelled a foreign trip.
Oleg Gonchar works for a Christian radio station in Ukraine and told Premier's News Hour people there are scared.
He said: "These are peaceful people, they are not soldiers.
"But it doesn't matter to them [Pro Russian rebels] they just shoot and kill people, kill kids and kill women.
"It's terrible."
It's estimated around 20,000 Russian troops are waiting on the border with Ukraine.
Russia has been accused of orchestrating a new military campaign in Ukraine by the United States.
US State Department spokeswoman Jen Psaki said yesterday Russia was helping rebel forces expand their fight and was sending in tanks, rocket launchers and armoured vehicles.
"These incursions indicate a Russian-directed counter-offensive is likely underway in Donetsk and Luhansk," she said.
Hear more from Oleg Gonchar here: