Kiev, Ukraine (CNN) -- Armed pro-Russian rebels paraded dozens of captured Ukrainian soldiers through the streets of Donetsk in eastern Ukraine on Sunday afternoon, the rebel stronghold's counterprotest to Ukraine's Independence Day celebrations in other parts of the divided country.
A crowd of more than 1,000 people gathered to jeer and throw bottles at the prisoners, several of whom had bandaged heads and other wounds, calling them "fascists," "Nazis" and "traitors." The march started around 2 p.m. and lasted just a few minutes.
"The people came out to see the soldiers who had been shelling them around the clock, thanking the separatists for protecting them," said freelance journalist Maximilian Clarke, who witnessed the parade near Donetsk's Lenin Square. The rebels aren't foreigners who have invaded this city, he said. "The separatists here are locals; they are known here."
Water trucks followed the captured soldiers and hosed down the streets after the prisoners had passed, Clarke said. The streets cleared quickly after the brief march amid rumors that Ukraine would retaliate for the insult.
The rebels intended Sunday's "anti-fascist rally" to evoke the 1944 forced march of almost 60,000 captured Nazi prisoners through Moscow, according to a rebel social media account announcing the march.
In the capital city of Kiev, Ukraine's national government put on a display of military might to celebrate its Independence Day, with tanks, missile-launching vehicles, armored personnel carriers and soldier corps filing through the city.
Many of them will soon deploy to the country's eastern conflict to fight the pro-Russian insurgency.
Ukraine declared its independence in 1991 from the Russian-dominated Soviet Union as the USSR was dissolving.
After bloody street protests led to Kiev distancing itself more starkly from Moscow this year, Russia invaded and annexed the peninsula of Crimea. And the pro-Russian insurgency gained momentum.
Poroshenko: More military funding
Ukraine is fighting against foreign aggression, President Petro Poroshenko said in a commemoration speech.
"Events of the last months have become -- though undeclared -- real war," he said. And it is coming from a part of the world Ukraine traditionally would not have expected, he said, referring to Russia.
Poroshenko spoke from the Maidan, Kiev's Independence Square, where protesters once railed against his pro-Russian predecessor, Viktor Yanukovych, whom they drove from office.
Sunday's show of military might, reminiscent of Soviet-era parades, stood in stark contrast to the lack of funding for the country's military.
But Poroshenko vowed in his speech that Kiev will bulk up military funding by around $3 billion over the next three years to purchase military aircraft, helicopters and warships.
Funding might prove difficult due to Ukraine's fragile economy, falling salaries and a weak currency.
Seven of the country's richest people have publicly donated to the military, and supporters have contributed millions to crowdfunding campaigns for Ukraine's Defense Ministry.
The United States has pledged nonlethal military support -- equipment like night vision goggles and protective vests.
There's also growing international concern over the apparent massing of Russian troops at the border with Ukraine.
There were up to 18,000 such "combat-ready" troops on Friday, according to U.S. estimates, a significant increase from previous public estimates by the Pentagon.
U.N. officials estimate that more than 2,000 people have died and nearly 5,000 have been wounded in eastern Ukraine since mid-April.
The battles in eastern Ukraine took no break for Independence Day.
Five soldiers died in fights against rebels on Saturday and Sunday, Kiev's Defense Council said.
The city of Donetsk was hit by shelling overnight, causing 13 fires, according to the city website.
Shelling also continued in Luhansk, the city office said. It has been without water and power for 22 days.
Convoy back to Russia
A day earlier, a convoy of Russian trucks that had crossed that country's border into eastern Ukraine without Kiev's authorization returned to Russia, international monitors said Saturday.
In total, 227 vehicles were sent into territories held by pro-Russian rebels on Friday, according to the Organization for Security and Co-operation in Europe, which has an observer mission at the checkpoint the convoy went through.
By Saturday afternoon, they had all returned to Russia after delivering aid to the city of Luhansk, a stronghold for the pro-Russia rebels that has been caught up in conflict.
Russia said the vehicles were on an essential humanitarian mission and that it was satisfied with the deliveries, but international powers condemned it as a violation of Ukraine's sovereignty.
Officials in Kiev referred to it as an invasion.
Amid the furor, German Chancellor Angela Merkel met in Kiev on Saturday with Poroshenko.
At a joint news conference, Merkel said she could not rule out further sanctions against Russia if no progress is made in resolving the situation in eastern Ukraine.
Poroshenko said the Russian convoy had "violated every international law."
But he also said he was committed to constitutional reforms and decentralization of power aimed at meeting the concerns of the Russian-speaking population in eastern Ukraine.
The Ukrainian President is due to meet with Russian President Vladimir Putin and EU representatives on Tuesday in Minsk, Belarus.
Journalist Victoria Butenko reported from Kiev and CNN's Laura Smith-Spark wrote and reported in London. CNN's Ben Brumfield wrote and reported from Atlanta. Diana Magnay, Greg Botelho and Radina Gigova contributed to this report.