Kiev adopted a law labelling Moscow as an "aggressor" state in Donetsk and Luhansk provinces.
17 countries including the UK, France and Canada are taking part in the exercise.
Trump shakes Putin's hand at the G20 summit in Hamburg, Germany.
Defence ministry labelled blast that killed Maksim Shapoval as a 'terrorist act'
The newly elected French president said it is important to engage with Russia but also promised to be tough with Putin.
Syrian conflict and Ukrainian crisis are set to dominate the Putin-Merkel talks.
Kiev's foreign minister demands Russia's veto powers to be curbed during discussions about Ukrainian crisis.
Fighting has stopped in the government-held town of Avdiivka after week of violence.
Anti-aircraft weaponry and helicopters were also used in the exercises in Zagan.
General Sir Richard Shirreff said countries should provide bilateral support to Ukraine.
Obama urges Putin to work with the US, France, Germany and Ukraine to find a solution to the crisis.
With all parties supportive of Putin, the elections are not expected to change much.
Ukrainian President Petro Poroshenko hits back at Russia's 'insane and cynical' claims.
Russian helicopters and drones are also said to have conducted manoeuvres from Crimea.
The US Secretary of State John Kerry is due to meet Russian President Vladimir Putin in Moscow on Thursday.
Nato leaders to gather for crucial summit in Polish capital to discuss military deployment in the Baltics.
Former Soviet premier claimed "most in Crimea wanted to be reunited with Russia".
Yatseniuk said he will submit his official resignation to parliament on Tuesday.
Syrian conflict and Ukrainian crisis likely to dominate talks between Kerry and Russia.
Exports of vodka to Ukraine, one of the biggest export markets in previous years, dropped 70%
Uproar after company bowed to Russian pressure to include annexed territory in map.
The islands, seized by former Soviet Union, are administered by Russia.
