Heavily armed "terrorists" attacked a checkpoint in the Volnovakha area, killing or wounding a number of soldiers, the defence ministry said.
Associated Press journalists counted 11 bodies at the scene while a Russian website said 15 soldiers had died.
Russia appears to be withdrawing troops from its border with Ukraine. NATO chief Anders Fogh Rasmussen said in a tweet that Russian troop activity near the Ukraine border suggested some Russian forces were preparing to pull back.
Russian President Vladimir Putin ordered troops near the border to withdraw to their bases earlier this week.
Correspondents said removing the troops - estimated to number 40,000 - could help de-escalate the Ukraine crisis.
Ukrainians go to the polls on Sunday to choose a new president but voting in Donetsk and Luhansk has been seriously disrupted by the insurgency there.
The election was called after the last elected President, Viktor Yanukovych, was deposed in February amid mass protests against his pro-Russian policies.
Separatists have been skirmishing with security forces in Donetsk for weeks but this is the deadliest attack on soldiers to date.
AP's crew said 30 other soldiers had been wounded in the attack, outside the village of Blahodatne, which is near the town of Volnovakha.
Three charred Ukrainian armoured infantry vehicles, their turrets blown away by powerful explosions, and several burned lorries stood at the site of the fighting.
Amateur video appeared on Youtube showing what appears to be a glimpse of the attack site from a passing car.
The Russian source, pro-Kremlin news website Lifenews, quoted an unnamed police source as saying 15 had been killed and 35 wounded.
Both the defence ministry and Ukrainian military journalist Dmytro Tymchu blamed the latest attack on "terrorists" - the term commonly used by Ukrainian officials for armed pro-Russian separatists in Donetsk and the neighbouring Luhansk region.
But Donetsk rebel leader Pavel Gubarev went on Facebook to deny that separatist forces had attacked the soldiers.
Source: BBC News Europe