Russian President Vladimir Putin has accused Ukraine of waging "terror" over alleged attempted incursions into annexed Crimea that Kiev has fiercely denied.
Russia's security agency announced, it had thwarted "terrorist attacks" in Crimea by Ukrainian military intelligence and beaten back an armed assault, claims that have ratcheted up tensions first sparked by Moscow's 2014 annexation of the strategic Black Sea peninsula.
The FSB security service said in a statement that one of its officers was killed in armed clashes while arresting "terrorists" on the night of August 6-7, while a Russian soldier died in a firefight with "sabotage-terrorist" groups sent by the Ukrainian defence ministry on August 8.
"This is very alarming news. In fact, our security services prevented an incursion into the territory by a sabotage-reconnaissance group from Ukraine's defence ministry," Putin said.
The Kremlin leader accused the authorities in Kiev of "practising terror" and warned the deaths of the two Russian officers would have consequences.
"From the Russian side there were losses -- two servicemen killed. We obviously will not let such things slide by," Putin said.
"This is a very dangerous game. We will of course do everything to assure the security of infrastructure, citizens and will take additional measures to provide security, including serious additional measures."
Moscow and Kiev have been locked in a bitter feud since the Kremlin seized Crimea from Ukraine in March 2014 after Russian-backed president Viktor Yanukovych was ousted.
Ukrainian President Petro Poroshenko said Moscow's claims were "senseless and cynical."
"These fantasies are only another pretext for the next military threats toward Ukraine," Interfax news agency reported him as saying.
Ukraine's national security council chief Oleksandr Turchynov, meanwhile, branded the allegations as "hysterical and false" and said Moscow was trying to stoke fear in Crimea.
The defence ministry also dismissed the allegations as "nothing more than an attempt to justify the redeployment and aggressive actions" of Russian forces in the region.
Kiev's ambassador to the United Nations Volodymyr Yelchenko said, Ukraine would ask the UN Security Council to hold an urgent meeting if tensions continue to rise.
The Organization for Security and Cooperation in Europe (OSCE) monitoring the frontier between mainland Ukraine and Crimea did not report any incidents.
But it said road traffic was halted earlier this week and border guards appeared to be on "heightened alert."