The insurgents' leader in Slovyansk, Vyacheslav Ponomarev, was quoted by the Interfax news agency as saying he ordered the release because of increasing insecurity in the city. But he later The Associated Press that "they are not being released — they are leaving us, as we promised them."
Two Ukrainian helicopters were reported shot down outside the city on Friday, killing two crew members. The Ukrainian Defense Ministry said two other soldiers were killed in a clash on the city's edge.
Ponomarev said 10 local people were killed in a confrontation with soldiers on Slovyansk's outskirts. On Saturday, an Associated Press reporter saw the body of a middle-aged man at the site of that clash, lying on ground strewn with bullet casings, but the claim of 10 dead could not be confirmed.
On Saturday, news reports claimed fighting broke out in the city of Kramatorsk, about 15 kilometers (10 miles) south of Slovyansk.
Despite the release, tensions in Ukraine heightened sharply after at least 42 people died in clashes between government supporters and opponents in the Black Sea port of Odessa on Friday. The clash began with street fighting between the two sides in which as least three people were reported killed by gunfire, then turned into a grisly conflagration when government opponents took refuge in a building that caught fire after protesters threw firebombs inside.
At least 36 people died in the fire, according to the emergencies ministry. An Interior Ministry statement gave the overall death toll for the day at 42, but did not give a breakdown.
The city's police chief, Petr Lutsyuk, on Saturday issued a statement calling for calm in the city of about 1 million, but hours later he was fired by Interior Minister Arsen Avakov.
Russian President Vladimir Putin's spokesman on Saturday decried the Odessa deaths as evidence that the interim government in Kiev, which came to power following the toppling of the pro-Russia president after months of protests, encourages nationalist extremists.
"Their arms are up to their elbows in blood," Russian news agencies quoted Dmitry Peskov as saying.
Odessa, some 550 kilometers (330 miles) southwest of Slovyansk, had not previously seen significant confrontations in Ukraine's crisis, and the deaths there suggested that violent unrest could spread far from the relatively compact area in the east where it has been concentrated so far.
Odessa is the major city between the Crimean peninsula, which Russia annexed in March, and the Moldovan separatist region of Trans-Dniester where Russia has a military peacekeeping contingent. Some analysts speculate that Russia ultimately aims to take control of a huge swath of Ukraine from Transdniester to the east.
A three-day mourning period was declared in Odessa on Saturday; mourners came to the fire site to lay flowers. There were no signs of new unrest, but Valery Kaurov, a leader of the anti-government contingent in the city, told Russian state television that protests could resume once the mourning period ends.
There were also signs of a desire for revenge. A page appeared on Vkontakte, a Russian analogue of Facebook, showing photos and stating home addresses of people allegedly responsible for the fire deaths.
One of the released observers, German Col. Axel Schneider, told The Associated Press that all 12 of the detainees held up well.
"They had a very good attitude and that gave them the strength to stand the situation," he said. "According to the word of (Ponomarev), we have been treated as good as possible. This is a miserable situation, but we were under his protection."