The so-called Lugansk People's Republic, one of two regions controlled by the rebels, has for years been blighted by leadership squabbles and several senior leaders have been assassinated.
Yesterday, hundreds of armed men in military fatigues without insignia blocked access to government buildings in what one of the soldiers described as military drills ordered by the Lugansk interior ministry.
The blockade remained in place today. An AFP correspondent saw about ten military trucks and a grenade launcher driving around the city.
Patrols began after Lugansk leader Igor Plotnitsky earlier this week sacked his interior minister, Igor Kornet, in an apparent spike in infighting between rebel factions plaguing the war-scarred region.
"Kornet was removed from his post but apparently the little man has great ambitions," Plotnitsky told journalists during a news conference on Wednesday.
He accused Kornet of being behind an "armed attempt to seize power" in Lugansk and added that his supporters had detained several employees of the local prosecutor's office.
Speaking in video footage released by his office earlier today, Plotnitsky said that "we underestimated the number and the nature of offences or, as we can now say, crimes that the former head of the interior ministry committed".
"The police are starting to work, there will be no lawlessness."
The sacked minister, who has refused to step down, released no immediate comment.
Russian President Vladimir Putin's spokesman Dmitry Peskov said the Kremlin was aware of the situation but declined immediate comment.
Outside the cordoned-off area, Lugansk residents went about their daily lives as usual.
A conflict between Russia-backed fighters and Ukrainian troops has killed more than 10,000 people since 2014, when pro-Russian forces declared parts of eastern Ukraine independent following Moscow's annexation of Crimea.
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