As masked gunmen storm the parliament of Ukraine's strategic Crimea region, Russian fighter jets scream above the border, sparking fears of a potentially dangerous confrontation reminiscent of Cold War brinksmanship.
Ukraine's newly formed government has pledged to prevent a national breakup with the strong backing of the West.
Moscow reportedly granted shelter to Ukraine's fugitive president, Viktor Yanukovych, who was said to be holed up in a luxury government retreat and to have scheduled a news conference on Friday (local time) near the Ukrainian border.
As gunmen wearing unmarked camouflage uniforms erected a sign reading "Crimea is Russia" in the provincial capital, Ukraine's interim prime minister declared that the Black Sea territory "has been and will be a part of Ukraine."
The escalating conflict sent Ukraine's finances plummeting further, prompting Western leaders to prepare an emergency financial package.
Yanukovych, whose approach to Moscow set off three months of pro-Europe protests, finally fled by helicopter last weekend as his allies deserted him.
The humiliating exit was a severe blow to Russian President Vladimir Putin, who had been celebrating his signature Olympics even as Ukraine's drama came to a head. The Russian leader has long dreamt of pulling Ukraine - a huge country of 46 million people considered the cradle of Russian civilisation - closer into Moscow's orbit.
For Ukraine's neighbours, the spectre of Ukraine breaking up evoked memories of centuries of bloody conflict.
"Regional conflicts begin this way," said Polish Foreign Minister Radoslaw Sikorski, calling the confrontation "a very dangerous game."
Russia has pledged to respect Ukraine's territorial integrity. But the dispatch of Russian fighter jets on Thursday to Ukraine's borders and drills by some 150,000 Russian soldiers - almost the entirety of its troop force in the western part of the country - signalled strong determination not to lose Ukraine to the West.
The dramatic developments overnight pose an immediate challenge to Ukraine's new authorities as they named an interim government for the country, whose population is divided in loyalties between Russia and the West.
Crimea, which was seized by Russian forces in the 18th century under Catherine the Great, was once the crown jewel in Russian and then Soviet empires.
In the capital, Kiev, the new prime minister said Ukraine's future lay in the European Union, but with friendly relations with Russia.
Arseniy Yatsenyuk, picked in a boisterous parliamentary session, now faces the thorny task of restoring stability in a country that is not only deeply divided politically but on the verge of financial collapse.
The 39-year-old served as economy minister, foreign minister and parliamentary speaker before Yanukovych took office in 2010, and is widely viewed as a technocratic reformer who enjoys the support of the US.
Shortly before the lawmakers chose him, Yatsenyuk insisted that the country wouldn't accept the secession of Crimea. The Black Sea territory, he declared, "has been and will be a part of Ukraine."
In Simferopol, the Crimean regional capital, gunmen toting rocket-propelled grenades and sniper rifles raised the Russian flag over the local parliament building. The men threw a flash grenade in response to a journalist's questions. They wore black and orange ribbons, a Russian symbol of victory in World War II.
Oleksandr Turchynov, who stepped in as acting president after Yanukovych's flight, condemned the assault as a "crime against the government of Ukraine." He warned that any move by Russian troops off of their base in Crimea "will be considered a military aggression."
"I have given orders to the military to use all methods necessary to protect the citizens, punish the criminals, and to free the buildings," he said.
Experts described a delicate situation in which one sudden move could lead to wider conflict.
"The main concern at this point is that Kiev might decide to intervene by sending law enforcement people to restore constitutional order," said Dmitry Trenin, head of the Carnegie Moscow Center. "That is something that would lead to confrontation and drag the Russians in."
In a bid to shore up Ukraine's fledgling administration, the Washington-based International Monetary Fund said it was "ready to respond" to Ukraine's bid for financial assistance. The European Union was also considering emergency loans for a country that was the chief conduit of Russian natural gas to western Europe.
IMF chief Christine Lagarde said in the organisation's first official statement on Ukraine's crisis that it was in intense talks with its partners on "how best to help Ukraine at this critical moment in its history." Ukraine's finance ministry said it needed US$35 billion for this year and next to avoid default. Ukraine's currency, the hryvnia, dropped to a new record low of 11.25 to the US dollar, a sign of the country's financial distress.
Western leaders lined up to support the new Ukrainian leadership, with the German and British leaders warning Russia not to interfere.
"Every country should respect the territorial integrity and sovereignty of the Ukraine," British Prime Minister David Cameron said after a meeting with German Chancellor Angela Merkel in London.
NATO defence ministers met in Brussels, and US Defence Secretary Chuck Hagel emerged appealing for calm.
"These are difficult times," he said, "but these are times for cool, wise leadership on Russia's side and everyone's side."
Yet the prospect of the West luring Ukraine into NATO is the very nightmare that Russia is desperately trying to avoid. Trenin of the Carnegie Center said a Ukraine-NATO courtship "would really raise the alarm levels in Moscow."
Yanukovych declared on Thursday in a statement that he remains Ukraine's legitimate president. He was reportedly to hold a news conference Friday in the southern Russian city of Rostov-on-Don, not far from the Ukrainian border.
A respected Russian news organisation said that the fugitive leader was staying at the Kremlin-run Barvikha retreat just outside Moscow, though spokesmen for Putin and for the department that ran the resort told The Associated Press that they had no information about Yanukovych's whereabouts.
"I have to ask Russia to ensure my personal safety from extremists," Yanukovych's statement read, according to Russian news agencies. Shortly after, the same three news agencies quoted an unnamed Russian official as saying that Yanukovych's request had been granted.
Yanukovych fled after riot police attacked protesters in Kiev's central square in clashes that killed more than 80 people, and European and Russian officials intervened. He has not been seen publicly since Saturday. Legal experts say that his flight and the appointment of a new government make his stance he is the legitimate president moot.
On Thursday, the White House said Yanukovych "abdicated his responsibility" and welcomed the Ukrainian parliament's efforts to stabilise the country.
The Russian Foreign Ministry voiced concern about the Russian-speaking population in Ukraine and vowed to protect their interests. State-owned ITAR-Tass news agency quoted a statement read at a session of the ministry's board on Thursday, saying that Russia "will have a firm and uncompromising response to violations of the rights of compatriots by foreign states."
In Crimea's capital, Maxim, a pro-Russian activist who refused to give his last name, said he and other activists had camped overnight outside the local parliament in Simferopol when 50-60 men wearing flak jackets and carrying rocket-propelled grenade launchers and sniper rifles took over the building.
"Our activists were sitting there all night calmly, building the barricades," he said. "At 5 o'clock unknown men turned up and went to the building. They got into the courtyard and put everyone on the ground.
"They were asking who we were. When we said we stand for the Russian language and Russia, they said: 'Don't be afraid. We're with you.' Then they began to storm the building bringing down the doors," he said. "They didn't look like volunteers or amateurs; they were professionals. This was clearly a well-organised operation."
"Who are they?" he added. "Nobody knows."