Russian President Vladimir Putin and British Prime Minister David Cameron, in a phone call today, agreed the Ukrainian crisis can only be solved through "peaceful means", the Kremlin said in a statement.

"The Russian President noted, in particular, the fundamental importance of the soonest and unconditional implementation by the Kiev authorities of the provisions of the Geneva statement of April 17 to de-escalate tensions in the country," it added.

Meanwhile, Ukrainian Prime Minister Arseny Yatsenyuk threatened his government with a reshuffle if it failed to meet the demands of the people.

With Kiev's authority crumbling in its industrial eastern regions, where pro-Russian separatists have seized buildings with little opposition from police, some critics say the central government has become all but paralysed by infighting.

"The country demands action and results. If there is such action and results that means the government is doing its job," Mr Yatsenyuk told a government meeting.

"If in the near future such action and results fail to appear, that means there will be personnel changes," he added.

Mr Yatsenyuk said ministers would also pass to parliament a law on conducting a nationwide poll on Ukrainian unity and territorial integrity, "those questions which worry Ukraine today", on 25 May when Ukraine is due to hold a presidential election.

The poll is non-binding but an attempt to thwart the demands of pro-Russian rebels to hold a referendum on independence on 11 May for at least two eastern regions.

Meanwhile, the International Monetary Fund has approved a $17 billion aid deal for Ukraine.

The IMF executive board's green light opens the way for an immediate deployment of $3.2 billion to Kiev, which faces  deep fiscal problems, compounding its political crisis.

Elsewhere, Pro-Russian separatists have seized control of state buildings in the town of Horlivka, tightening their grip on swathes of Ukraine's industrial east almost unopposed by police.

The separatists blockaded the region's police headquarters earlier in April and today took over the police division in town and the government administration, a police official said.

The town of almost 300,000 people sits just north of Donetsk, where mainly Russian-speaking separatists have declared a "People's Republic" and plan a referendum on secession on 11 May.

"They've taken them. The government administration and police," the police official in Donetsk said.

Towns and cities across Ukraine's Donbass coalfield have slipped from the control of the pro-Western central government since 6 April.

The armed uprising followed the overthrow of Moscow-backed President Viktor Yanukovych and Russia's annexation of Crimea.

The operation in Horlivka follows the fall to separatists yesterday of provincial capital Luhansk, further east towards the Russian border.

Ukraine says no military exercises planned in Kiev

Ukraine's defence ministry said it had no plans to hold military exercises in the capital Kiev tonight.

This contradicts an earlier statement on the website of the government and the city administration.

"All personnel and hardware are in their permanent positions and will not undertake exercises in central Kiev," the ministry said.

Asked about the contradiction, two security sources said the state security guard, which secures the president and top government officials, would hold training exercises in the capital.