Ukraine's parliament is to decide whether to bring in martial law, after the capture of three of its naval vessels by Russia.
The three ships were sailing off the coast of Crimea, which was annexed by Russia in 2014, when they were seized.
Ukraine said Russia rammed one of its boats in an "act of aggression", while Russia said the ships had illegally entered its waters.
The incident marks a major escalation of tension between the two countries.
This is the first time the two militaries have come into open conflict in recent years, although Ukrainian forces have been fighting Russian-backed separatists in the east of the country.
The captured crew members are now being questioned in Kerch, Russia says.
On Sunday morning, Ukraine's Berdyansk and Nikopol gunboats, and the Yani Kapu tug, tried to sail from the Black Sea port of Odessa to Mariupol in the Sea of Azov.
Under a 2003 treaty between the governments in Moscow and Kiev, the Kerch Strait and the Sea of Azov are shared territorial waters.
However, Russia accused the Ukrainian ships of illegally entering its waters.
Ukraine says the Russians tried to intercept the ships, ramming the tug.
The vessels continued towards the Kerch Strait, the only way to enter the Sea of Azov, but were blocked by a tanker placed under the Kerch bridge. The ships were then seized by Russia.
Russia also scrambled two fighter jets and two helicopters to the area.
The Ukrainian navy said its boats were hit and disabled as they tried to leave the area. It said 23 Ukrainians were on board and six crew members had been injured.
Russia's FSB security service confirmed that one of its patrol boats had used force to seize the vessels but said only three sailors had been hurt.
Russia has also accused Ukraine of violating legal norms by sending the vessels into its territorial waters in a "pre-planned provocation".
Foreign ministry Sergei Lavrov said Ukraine broke "key provisions of international law" including naval law.
Under the current treaty, vessels from both sides enjoy freedom of navigation in the area.
However, Russia annexed Crimea, which borders the Ukrainian side of the strait, in 2014, following a Moscow-backed referendum that the UN condemned as illegal.
It also constructed the bridge linking Russia to Crimea earlier this year, despite opposition from Ukraine.
Meanwhile, Ukraine argues that it had informed the Russians in advance of its plan to move its ships through the sea to Mariupol.
It has accused Russia of blocking access to the Kerch Strait, and described the seizure of the ships as "another act of armed aggression" by Russia.
Ukrainian military chief Viktor Muzhenko told the Unian news agency that the Russian coast guards had "fired to kill" during the confrontation.
There have been growing tensions between the two sides over access to the Black Sea and the Sea of Azov.
In recent months, Russia has begun inspecting all vessels sailing to or from Ukrainian ports.
The inspections began soon after Ukraine detained a fishing vessel from Crimea in March. Moscow says the checks are necessary for security reasons, pointing to a potential threat to the Kerch bridge from Ukrainian radicals.
Ukraine has accused Russia of trying to occupy the Azov sea and damage Ukraine's economy by hindering access to two important ports, Berdyansk and Mariupol.
President Petro Poroshenko told the Washington Post in September that iron and steel products from Mariupol make up 25% of Ukraine's export revenue.
The standoff has been met with anger in Ukraine.
Late on Sunday, about 150 people gathered outside the Russian embassy in Kiev, some throwing flares. At least one car belonging to the embassy was set alight.
President Poroshenko described the Russian actions as "unprovoked and crazy", and said he would ask parliament on Monday to introduce martial law. He has now signed the decree requesting parliament to do so.
However, he stressed that this did not mean a "declaration of war… Ukraine does not plan to fight anyone".
The Ukrainian defence ministry announced that orders had been given to put the military on full combat alert.
Martial law could give the government the power to restrict public demonstrations, regulate the media, suspend elections, and oblige citizens to carry out "socially necessary" tasks such as working at a defence facility, local media report.
Ukraine's parliament will discuss the proposal at 16:00 local time (14:00 GMT).
If approved, it would be the first time Ukraine has enacted martial law since the beginning of the Ukraine-Russia conflict in 2014.
However, politicians are split on the issue, with some expressing concern that it could lead to the 2019 presidential and parliamentary elections being cancelled.
BBC
