At least 70 anti-government protesters have reportedly been killed after police fired live rounds near Independence Square in Ukraine's capital Kiev.
The claim was made by a doctor working with the activists, who said more than 500 demonstrators had been injured and warned the death toll could rise further.
Meanwhile, the interior ministry said protesters had taken 67 police officers hostage, thought to be in the occupied city hall.
Hotel lobbies have been turned into makeshift hospitals, where some of the injured activists were given emergency treatment. It was the deadliest day of clashes in three months of protests in the capital.
Government snipers apparently fired at demonstrators after petrol bombs were hurled at police lines. Armed protesters then returned gunfire.
The interior ministry said authorities had repeatedly warned activists they were breaking the law.
Residents have been told by police not to go outside, and Kiev's mayor has resigned from the ruling party in protest over the bloodshed.
The city's health department said 67 people had been killed since Tuesday.
EU foreign ministers meeting in Brussels agreed to impose sanctions on officials held responsible for the violence, including a travel ban and asset freeze on close allies of Ukraine's president Viktor Yanukovych.
He has been discussing a possible "roadmap" with German, French and Polish foreign ministers to try to end the crisis and was willing to hold early elections this year, according to reports.
Prime Minister David Cameron spoke to German Chancellor Angela Merkel and Russian President Vladimir Putin on the phone, where they all expressed the "utmost concern" over the violence, said the Kremlin.
Earlier, Sky's David Bowden said a "new front line" had emerged around 100 metres from the main square, after protesters pushed their way up a nearby street towards the government district after a truce between both sides crumbled.
Police "scurried away" to the top of the street in panic, before launching a counter attack.
He said: "Police are hitting back and are shooting – probably not at random – but they are shooting with live rounds at the protesters.
"The police seem to have been caught off guard and they're reacting very aggressively and basically just shooting people." He added that police have weapons "of every denomination".
"There was, for a brief point, a sniper with a sniper rifle on a tripod and a spotter picking off protesters for a while."
He said his hotel overlooking the square was surrounded, while the parliament has been evacuated because of fears protesters would storm it.
At one point a bullet came through the window of the main hotel overlooking Independence Square which was thought to be from the crowd of protesters who believe police had infiltrated the building.
Bowden observed protesters digging up the pavement blocks, using half of them to prop up their barricades, while reserving the other half for use as missiles against the police.
He added the activists were building a barrier about 12-15ft high and were "moving piles of tyres to create a big smokescreen because they fear the police will try and pick them off one by one with snipers on rooftops further up the road".
In the evening, the situation appeared a little calmer as prayers were held for the protesters who had died over the course of the day.
One of the main opposition leaders, former boxing world champion Vitali Klitschko, said: "Armed criminals and toughs were unleashed to beat people to show that there is conflict among people. But these plans are doomed."
The protests started last November over Mr Yanukovych's decision to have closer ties with Russia rather than Europe.
Sky's Katie Stallard said "nothing less" than the resignation of Mr Yanukovych was likely to stop the demonstrators.
The fresh violence comes after he announced a truce with the opposition after violent clashes with riot police killed at least 26 people on Wednesday.
Russia has warned Ukraine's president not to let opponents walk over him "like a doormat", in a strong signal that Moscow wants order on the streets before handing over extra cash to stave off bankruptcy.
Foreign Secretary William Hague said the Ukraine government's actions were "utterly indefensible" and President Barack Obama urged Mr Yanukovych to withdraw his forces from the affected area.
The Ukrainian ambassador was summoned to the Foreign Office by the Minister for Europe, David Lidington. Mr Lidington is said to be "very angry" about the use of live fire.
Mr Putin is sending an envoy to Ukraine at the request of Mr Yanukovych, to try to mediate talks between the government and opposition.
The Foreign Office is advising against all but essential travel to Kiev and UK nationals currently there should stay inside.
:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.