Oleksandr Muzychko, better known as Sashko Bilyi, died in a shoot-out with police in a cafe in Rivne in western Ukraine, the interior ministry said.
He was a leader of Right Sector, a far-right group which was prominent in the recent anti-government protests.
Meanwhile, Ukraine’s parliament has voted to accept the resignation of Defense Minister Ihor Tenyukh.
Ihor Tenyukh had been accused of indecision in the face of Russia’s military takeover of Crimea.
The shooting of Oleksandr Muzychko happened just hours after Russian Foreign Minister Sergei Lavrov had held talks with his Ukrainian counterpart Andriy Deshchytsia – their first meeting since Russia’s move into Crimea triggered a diplomatic crisis.
Ukraine’s Deputy Interior Minister Vladimir Yevdokimov said Oleksandr Muzychko died after opening fire at police and Sokol special forces, who had raided a cafe to arrest him and fellow ultra-nationalists. The authorities described Oleksandr Muzychko as a criminal gang leader.
During the raid, Oleksandr Muzychko fired at police as he was trying to flee, wounding one of them. Police then returned fire and captured him and three others in his “criminal gang”, Vladimir Yevdokimov said.
“He was still alive as they were arresting him – but then the paramedics, called to the scene, found that he had died,” Vladimir Yevdokimov said.
The three arrested gang members have been taken to Kiev for questioning.
A Right Sector organizer in Rivne has now threatened revenge for the killing of Oleksandr Muzychko, saying he had not been summoned by investigators.
“We will avenge ourselves on [Interior Minister] Arsen Avakov for the death of our brother. The shooting of Sashko Bily is a contract killing ordered by the minister,” said Roman Koval of the Right Sector in Rivne region, quoted by the Ukrayinska Pravda website.
Earlier, Ukrainian lawmaker Oles Doniy, gave a different version of events. He said two cars had forced Oleksandr Muzychko’s car to stop, and he had then been dragged into one of the other cars. Later his body was found dumped, his hands tied behind his back and two bullet wounds in his heart, Oles Doniy wrote overnight on his Facebook page.
Correspondents say Oleksandr Muzychko acquired notoriety in Ukraine after he was filmed brandishing an AK-47 assault rifle at a town hall session in western Ukraine, and then harassing a local prosecutor. After that, in February, the Ukrainian interior minister condemned his behavior and promised to investigate.
Moscow says the activities of Right Sector and other Ukrainian nationalist groups pose a threat to the large Russian-speaking minority in Ukraine. President Vladimir Putin gave that as one of his reasons for intervening in Crimea.
However, some commentators say Russia has deliberately whipped up such fears, and that the influence of Right Sector in Ukrainian politics is exaggerated.
Earlier, Russian authorities issued an arrest warrant for Oleksandr Muzychko, accusing him of atrocities against Russian soldiers in Chechnya.
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