Ukraine's parliament is to decide whether to bring in martial law as anger over the capture of three of its naval vessels by Russia spilled into the streets overnight.
Protesters gathered outside the Russian embassy in the capital Kiev and an embassy car was set on fire.
The incident in waters off the Crimean Peninsula marks a major escalation of tension between the two countries.
The UN Security Council will hold an emergency meeting as a result.
Each country blames the other for the incident in which two gunboats and a tug were captured and a number of Ukrainian crew members injured, reports the BBC.
Later, about 150 people gathered outside the Russian embassy, some throwing flares. At least one car belonging to the embassy was set alight.
"We gathered here today to protest against Russians over their actions today, over shooting of our military," Oleksiy Ryabov told Reuters news agency.
"We are very angry. We should have severed all diplomatic relations with this country a long time ago."
During a meeting of Ukraine's National Security and Defense Council, President Petro Poroshenko described the Russian actions as "unprovoked and crazy".
He said he would ask parliament on Monday to introduce martial law but stressed that this did not mean a "declaration of war". "Ukraine does not plan to fight anyone," he said.
Meanwhile, the Ukrainian defense ministry announced that orders had been given to put the military on full combat readiness.
Tensions rose recently in the Black Sea and the Sea of Azov off the Crimean peninsula - annexed by Russia in 2014.
How did the crisis unfold?
The crisis began when Russia accused the Ukrainian ships of illegally entering its waters.
In the morning, Ukraine's Berdyansk and Nikopol gunboats, and the Yana Kapa tug, tried to sail from the Black Sea port of Odessa to Mariupol in the Sea of Azov, which is shared between the two countries.
Ukraine says the Russians tried to intercept the ships, ramming the tug. The vessels continued towards the Kerch Strait, the only access to the Sea of Azov, but were prevented by a tanker placed under a bridge which had been placed there by the Russians.
Russia scrambled two fighter jets and two helicopters to the area. It accused the ships of illegally entering its waters and said the traffic had been suspended for security reasons.
The Ukrainian navy later said the boats had been hit and disabled as they tried to leave the area. It said six crew members had been injured.
Russia's FSB later confirmed that one of its patrol boats had used force to seize the three Ukrainian vessels but said only three sailors had been wounded.
Ukraine said it had informed the Russians of its plan to move its ships through the sea to Mariupol.