Fires were reported to flare up all across Semenovka, the eastern suburb of Slavyansk that sits on one of the major roads to the city.
Its unfortunate location has turned the village into a battleground for Ukrainian troops.
The shelling around Slavyansk is said to be continuing, although the incident in Semenovka is the first time that the Ukrainian military has used incendiary bombs against the civil population in the turbulent Donetsk region.
Slavyansk is situated close to the region's capital Donetsk, a flashpoint city that became the capital of the recently proclaimed Donetsk People's Republic (DPR).
Violence in southeastern Ukraine has been on the rise since the beginning of a punitive operation launched by Kiev authorities in mid-April, and has claimed hundreds of casualties.
The operation came after the People's Republics of Donetsk and Luhansk declared themselves independent following a May 11 referendum, and started to form governments and law enforcement agencies.
Military activities were halted during the May 25 presidential elections, only to resume on May 26.
Artillery and aviation have struck civilian sites, and many peaceful residents have become victims of the conflict.
Moscow has repeatedly called on Kiev to stop its military operation and start a direct dialogue with independence supporters.
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