Ukraine reported that pro-Russian rebel forces entered a strategically critical town in the southeast on Wednesday, Censor.NET reports citing Freebeacon.
"We've also seen reports of separatists shelling residential areas in a coastal town between the border and Mariupol, and we have seen reports of heavy fighting and shelling near the city and airport in Donetsk," Psaki told reporters.
Psaki said the news was "of deep concern to us."
"We're also concerned by the Russian government's unwillingness to tell the truth even as its soldiers are found 30 miles inside Ukraine," Psaki said. "Russia is sending its young men into Ukraine, but are telling - are not telling them where they're going or telling their parents what they're doing."
A reporter asked Psaki why she used the word "likely" rather than outright confirming that a counteroffensive is underway.
"I decided to say 'likely,'" Psaki replied.
"I wouldn't be saying it," she added, "if we weren't as concerned as my comments indicate."