At least seven people are reported to have been killed when a city bus was hit by an artillery shell in a separatist stronghold in east Ukraine.
The shell struck the vehicle in Donetsk, instantly killing numerous passengers and blowing out the windows of a nearby building.
A rebel official at the site said up to 10 people might have been killed.
Fighting between Ukrainian government troops and separatist forces surged after the New Year, following a month of relative tranquillity after a truce was declared in early December.
Residential areas are frequently struck as a result of artillery duels between the warring sides. It was unclear who was responsible for the attack that led the shelling of the bus.
Earlier, diplomats from Russia and Ukraine agreed on a dividing line from where both sides should pull back their heavy weapons.
The deal came just hours after separatist forces deployed more arms and manpower to an emerging flashpoint in eastern Ukraine.
Germany’s foreign minister Frank-Walter Steinmeier, who hosted a meeting of his counterparts from Russia, Ukraine and France, said the four parties had agreed the demarcation line defined in the Minsk agreement of last year should form the basis for the withdrawal.
Under the plan, Ukraine and the pro-Russian separatists would pull back their heavy arms nine miles on either side of the line, though there was no agreement on a withdrawal of all troops.
Mr Steinmeier said after the meeting in Berlin: “Today we have finally agreed that the demarcation line mentioned in the Minsk agreement is the line from where the withdrawal of heavy weapons needs to take place now.”
He said the agreement had been “difficult work” and the talks, which follow a fruitless round of negotiations last week, were “testing the patience of all involved”.
The parties also agreed that the contact group of Ukraine, Russia, and the Organisation for Security and Co-operation in Europe (OSCE) should meet as soon as possible to lay further groundwork for a high-level meeting in Kazakhstan’s capital Astana aimed at reaching a long-lasting settlement.
Separately, Russian foreign minister Sergey Lavrov said the “strong support” for the pull-back was the meeting’s most important result.
He said the foreign ministers did not discuss the sanctions that the West has imposed on Russia over the Ukraine crisis: “The sanctions are not our problem, it is the problem of those who introduced them and now do not know how to extricate themselves.”
Earlier yesterday, Mr Lavrov had urged measures to contain the unfolding unrest, but said nothing about the rebels surrendering territory they acquired in violation of a peace deal concluded in September in Belarus.
Ukraine says separatist forces that are backed by Russia have overstepped agreed-upon frontline boundaries between the warring sides by 190 square miles.
A fresh separatist advance is under way in an area north west of Luhansk, the second-largest rebel-held city. The fighting is centred on two checkpoints along a strategic highway.
Ukraine’s defence ministry said one of those positions, Checkpoint 31, had been abandoned but operations were under way to retake it.
Ukraine and the West accuse Russia of providing material support to the separatists, which Moscow denies.
The sheer amount of sophisticated heavy weaponry in the hands of the insurgents is widely seen as overwhelming evidence of direct involvement by Russia.
Addressing the World Economic Forum in Davos, Ukrainian president Petro Poroshenko held up a piece of a bullet-riddled bus as evidence of shelling last week by Russian heavy artillery in his country. He says 9,000 Russian troops are occupying 7% of Ukrainian territory.
He said the metal came from a bus in the town of Volnovakha, where 13 people were killed by what he described as Russian shelling.
“For me this is a symbol, a symbol of the terroristic attack against my country,” he said, comparing it to the downing of Malaysia Airlines Flight 17 over rebel-held eastern Ukraine last summer.
He called it a “global problem,” extending far beyond just Ukraine’s borders, cutting short his visit to Davos to deal with the crisis in his country.
The fighting in the Luhansk region follows intense clashes over the weekend for control of the airport on the fringes of the main rebel city, Donetsk.
The terminal – once the pride of the city but now reduced to a burned-out shell - is of limited strategic value.
Now it has acquired symbolic value because of the Ukrainian forces’ stand against waves of separatist attacks.
The fierce airport battle shattered the relative tranquillity that had been in place since a new truce was reached in early December.