Russia continues to warn that Ukraine is heading into a civil war — one that most outside observers believe Russia has deliberately fomented. Confused reports coming from the eastern provinces suggest that a war could be inevitable, whether Russia stops exacerbating internal strife or not. The government in Kyiv moved to retake parts of cities held by “pro-Russian separatists” who appear to be in some cases actual Russian paramilitary personnel. The Ukrainian army moved in force to Kramatorsk and other parts of Donetsk, as CNN’s Nick Paton Walsh stood by:

Helicopters and a fighter jet circled the skies above the tense eastern Ukrainian city of Kramatorsk Wednesday, while on the streets below a column of tanks rolled through the city — one with a Russian flag affixed.

A similar convoy of armored personnel carriers also entered the city of Slaviansk, some 100 miles from the border with Russia.

Amid the soaring tensions, confusion is rife.

According to unconfirmed Russian media reports, residents of Kramatorsk captured several armored vehicles from the Ukrainian army. But it’s not clear if that is the reason the Russian flags are on display.

According to the Washington Post, the Russian flags appeared when Ukrainian troops defected after arriving in Donestk:

Tensions escalated in eastern Ukraine on Wednesday, with pro-Russian gunmen storming City Hall in the sprawling city of Donetsk and a cluster of Ukrainian troops meant to be restoring order in the region apparently defecting to the side of separatists.

The events suggested the challenge ahead for the pro-Western Ukrainian government on the second day of a campaign to quell the restive east, and came as Russian President Vladimir Putin warned that Ukraine was on the verge “of a civil war.”

A line of combat vehicles flying Russian flags rolled Wednesday morning into Slovyansk, a city of 120,000 where separatists have set up roadblocks since Saturday. One soldier named Andrei, speaking to the Associated Press, identified the men as part of the 25th Brigade of Ukraine’s airborne forces that had switched to the side of pro-Russian forces. The troops in green camouflage and packing automatic weapons and grenade launchers received a warm welcome from local separatists, AP said. The report could not be immediately verified.

Around 10 a.m. local time, a squad of separatists backed by seven masked gunmen in camouflage stormed the seat of Donetsk’s mayor and local council. On Wednesday morning, they appeared to be allowing employees in this city of nearly 1 million people to exit the building freely, and suited bureaucrats were running back and forth to vehicles in an attempt to save files and computers. A barricade of old tires blocked the rear entrance while men in unmarked camouflage patrolled the front of the building.

The Ukrainians are still pressing ahead nonetheless:

What is the US prepared to do to assist Kyiv? After the White House admitted that CIA Director John Brennan did indeed make a trip to Ukraine’s capital, Eli Lake and Josh Rogin report for The Daily Beast that more cooperation on real-time intelligence may finally be available to Kyiv:

Over the weekend, CIA Director John Brennan met with Ukrainian Prime Minister Arseniy Yatsenyuk and First Deputy Prime Minister Vitaliy Yarema to discuss the formation of new, more secure channels for sharing U.S. intelligence with the country now fighting pro-Russian secessionists in its eastern cities, according to U.S. and Western officials briefed on the meeting.

It’s a vitally important issue because the Ukrainians are badly outmatched by the Russian forces massed on their border and infiltrating their cities. If Kiev is going to have a hope of withstanding the pressure from Moscow, their intelligence on the Russian military’s activities will have to be exquisite.

The Daily Beast reported last week that Gen. Philip Breedlove had pushed to share more satellite imagery and other forms of detailed data about nearby Russian troop, but was rebuffed by the White House. U.S. intelligence agencies have long suspected Ukraine’s military and intelligence services to be entirely penetrated by the Russian government because until February the two countries were partners on security issues.

“That place has been run by the Russians for years,” a senior U.S. intelligence official told The Daily Beast. “They are very good at collecting any form of communications intelligence, they probably own their network there.” But this official added that nonetheless “there have been ways to communicate between the intelligence services that would be helpful for real-time sharing with Ukraine.”

The defections in the front-line troops shows that CIA concerns about data sharing in real time are entirely rational. How many in Ukraine’s intel groups will defect down the road, too? How many who are Russian assets will stick around and keep absorbing information on American capabilities? It’s a tough spot, which is why Brennan and the White House have moved carefully on this point.

The cleanest option at the moment is increased economic sanctions. The Associated Press reports that the conflict may lop almost two points off of the Russian economy already, so this could be a very tender spot for Vladimir Putin and his wealthy support system:

Russia’s economy slowed sharply in the first three months of the year as uncertainty over the crisis in Ukraine spooked investors into pulling money out of the country, a government minister said Wednesday.

Economy Minister Alexei Ulyukayev told parliament that growth was only 0.8 percent in the first quarter — far short of the ministry’s earlier prediction of 2.5 percent — because of “the acute international situation of the past two months” as well as “serious capital flight.”

Russian markets have been rattled by tensions between Moscow and neighboring Ukraine, where Russia annexed the Black Sea region of Crimea last month. The main stock index in Moscow tanked 10 percent in March, wiping out billions in market capitalization. In the first three months of 2014, the ruble lost 9 percent against the dollar, making imports more expensive, while spooked investors pulled about $70 billion out of the country — more than in all of 2013. …

So far, the U.S. and the EU sanctions have been limited to individual Russian politicians and businessmen close to the Kremlin. But the possibility of tougher sanctions has been enough to hinder investment, which dropped 4.8 percent in the first quarter, according to Ulyukayev.

The pcoketbook may be our only effective target for dissuading Putin from continuing his efforts to break up Ukraine. Enough pressure there, and Putin may face some defections among his own benefactors.