* Reports that Russian armoured vehicles entered east Ukraine
* Russian government denies the reports
* Fighting forces pro-Moscow separatists into retreat
* Russian aid convoy stalls, many trucks partially empty
By Adrian Croft and Dmitry Madorsky
BRUSSELS/KAMENSK-SHAKHTINSKY, Russia, Aug 15 (Reuters) - N ATO accused the Kremlin on Friday of escalating the conflict in Ukraine, following reports that a small column of Russian armoured vehicles had crossed overnight into an area of Ukraine where pro-Moscow rebels are battling government forces.
The Russian government denied its troops had entered Ukraine, but the media reports risked further inflaming tensions between Moscow and the West, which have already imposed costly economic restrictions on each other.
"If confirmed, they are further evidence that Russia is doing the very opposite of what it's saying. Russia has been escalating the conflict, even as it calls for de-escalation," NATO spokeswoman Oana Lungescu said.
At a meeting of European Union foreign ministers in Brussels, British Foreign Secretary Philip Hammond said he was alarmed that Russian forces might have crossed the border.
"If there are any Russian military personnel or vehicles in eastern Ukraine, they need to be withdrawn immediately or the consequences could be very serious," he told reporters. Lithuania's foreign minister also voiced concern.
Britain's Guardian newspaper said on Friday that its reporter had seen several armoured personnel carriers (APCs) crossing the border with Ukraine. (bit.ly/1pbRpYg)
Ukrainian officials said that some armoured vehicles did cross from Russian into Ukraine overnight, and that they were investigating.
"These movements into Ukrainian territory take place practically every day with the aim of provoking (the Ukrainian side)," said Oleksiy Dmytrashkivsky, a Ukrainian military spokesman.
Despite the allegations of a fresh Russian military incursion, the momentum on the battlefield in eastern Ukraine is with the government forces.
They are winning territory from the separatists almost daily, and in the main rebel strongholds of Donetsk and Luhansk are pounding the rebels with artillery strikes. Civilians have also been wounded and killed.
The rebels meanwhile appear to be in a disorderly retreat with three senior separatists removed from their post in the past seven days. One of them was Igor Strelkov, a Moscow native so feted among pro-Russian circles that T-shirts and mugs have been printed in Russia with his image.
COLUMN OF TRUCKS
Western worries about Russian intervention in eastern Ukraine had focused on a huge convoy that Moscow said was taking humanitarian supplies to Ukrainian civilians.
Some European officials had said the convoy could be a cover for a Russian military incursion, though Moscow dismissed that.
On Thursday, the convoy of some 280 trucks stopped in open fields near the Russian town of Kamensk-Shakhtinsky, about 20 km (12 miles) from the border in front of Izvaryne, which is under the control of pro-Russian separatists.
There were no signs it would move on any time soon, with negotiations dragging on between Russia, Ukraine, and the International Committee of the Red Cross over granting the convoy permission to enter Ukraine.
Reuters journalists who were allowed to look inside several of the trucks on Friday said that, while some were filled with pallets of bottled water and boxes of canned food, many were partially empty.
One driver sitting in the cab of a parked truck said he was carrying a cargo of tinned condensed milk. "All the pallets work out at 7 tonnes and 920 kilograms," he said. But he said the truck could carry 20 tonnes.
Russia says it needs to get the supplies urgently to people in the rebel-held cities of Luhansk and Donetsk. In Luhansk, people have been without running water and electricity for several days.
Asked about the amount of cargo in the trucks, a spokesman for the Russian Emergencies Ministry, overseeing the convoy, declined to comment.
Alexander Goltz, an independent Russian military analyst, said it was normal practice for similar convoys to travel with unused capacity so cargo could be transferred if any of the trucks broke down.
"One other explanation is that they (Russian officials) wanted to give the impression that the convoy was carrying far more than it really is," Goltz said.
SANCTIONS SQUEEZE
Apart from the trucks, a Reuters reporter with the convoy saw a dozen APCs on the move not far from the convoy. Another Reuters reporter saw two dozen APCs moving near the border with Ukraine on Thursday night.
The United States and the European Union have imposed sanctions on Russia over its role in east Ukraine and the earlier annexation of Crimea, in the worst crisis in relations between Moscow and the West since the Cold War.
The economic cost of the sanctions for both sides rose sharply last week when the Kremlin, in response to EU sanctions, halted imports of several food products from Western states.
Russian President Vladimir Putin on Friday had talks in the southern Russian resort of Sochi with the president of Finland, one of the EU states hardest hit by the Russian embargo.
Finnish President Sauli Niinisto told Putin, through a translator: "The catastrophe that happened in Ukraine is of course reflecting on all of us, affecting us all, and it has much broader implications than (just) local consequences."
"I would therefore want to talk to you about the opportunities to resolve the Ukraine (crisis), to stop the negative string of events and contribute to stabilisation, because all of that indeed affects all of us," he said.
The Finnish president's visit was unusual. He was the first EU leader to be hosted on Russian soil by Putin since before Russia's annexation of Crimea earlier this year.
Most EU leaders have preferred to stay away to show their displeasure over Russia's actions in Ukraine. (Additional reporting by Natalia Zinets in Kiev, Maria Tsvetkova and Alexander Winning in Moscow, and Alexei Anishchuk in Sochi, Russia; Editing by Robin Pomeroy)
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