Ukrainian military and separatist representatives exchanged dozens of prisoners under cover of darkness at a remote frontline location, kicking off a process intended to usher in peace to the conflict-ridden east.

Ukraine’s military and Russia-backed separatist rebels have accused each other of continuing to mount attacks a week after a ceasefire was called.

For the rebel fighters who seized control of the strategic town Ukraine of Debaltseve, it was a day of jubilation and bragging of victory.

Moscow pledges ‘adequate’ response as EU extends sanctions

Intense artillery exchanges between Ukrainian government forces and Russian-backed separatists have persisted around a strategic town in eastern Ukraine – fighting that threatens to dash a ceasefire deal brokered by European leaders last week.

Fierce fighting surged in eastern Ukraine yesterday as Russian-backed separatists mounted a major, sustained offensive to capture a strategic railway hub ahead of a weekend ceasefire deadline. At least 25 people were killed across the region, officials reported.

US President Barack Obama and German chancellor Angela Merkel have rallied behind efforts to reach a long-shot diplomatic resolution to the conflict between Russia and Ukraine, but offered no clear path if talks fail.

Ukrainian troops battled to repel waves of Russian-backed separatists trying to surround a strategic railway hub in eastern Ukraine, while in an ominous sign for peace efforts, the rebels announced plans to boost the size of their armed forces.

Ukrainian troops recaptured almost all the territory of Donetsk airport in eastern Ukraine they had lost to separatists in recent weeks, even as thousands gathered in Kiev for a state-sponsored peace march yesterday.

Ukraine’s president vowed today to reassert government control over eastern regions as the army unleashed a counter-offensive against Russian-backed separatist fighters vying for command over the airport in the city of Donetsk.

An attack on a passenger bus in eastern Ukraine has killed 11 people, likely dealing the final blow to hopes that a short-lived and shaky ceasefire could take hold.

Ukrainian separatists carried out sporadic attacks on government forces as the New Year began, wounding three soldiers, the Kiev military said, as President Petro Poroshenko told the nation to brace for a year that would “not be easy”.

A major exchange of war prisoners is getting under way in eastern Ukraine, with about 370 expected to be released.

A major exchange of war prisoners is getting under way in eastern Ukraine, with about 370 expected to be released.

Rebels in eastern Ukraine appear to be successfully closing in on the government-held airport in Donetsk, a strategic victory for the pro-Russian separatists that further undermines a shaky ceasefire in the region.

Shelling has killed six people and wounded 15 others in the Ukraine rebel stronghold of Donetsk, the city council said.

Ukraine is “still in a state of war” with neighbouring Russia despite a cease-fire between Kiev’s forces and Moscow-backed rebels in the east, the country’s prime minister said shortly after a second convoy of Russian trucks rolled into Ukraine.

A ceasefire between pro-Russian rebels and Ukrainian government troops appeared to be largely holding in eastern Ukraine, a day after shelling and clashes rattled nerves and imperilled the peace deal.

Witnesses in the Ukrainian port city of Mariupol reported sustained explosions outside the city last night, and a volunteer battalion of Ukrainian fighters says Grad rockets were fired at its positions.

Ukraine and the Russian-backed rebels have signed a ceasefire deal that starts this afternoon, the Organisation for Security and Co-operation in Europe (OSCE) confirmed.

Shelling resounded on the outskirts of a key Ukrainian port as Russian-backed rebels pressed their south-east offensive, just hours ahead of talks that are widely hoped to bring a ceasefire.

Russian military forces have been spotted in both major rebel-held cities in eastern Ukraine, an official said, prompting Ukraine to declare it now has to fight the Russian army, not just the separatists.

European Union leaders have stopped short of imposing immediate new sanctions against Moscow, despite tough rhetoric condemning Russia’s increasing military involvement in Ukraine.

The Ukrainian military said yesterday that more Russian soldiers had crossed the border into eastern Ukraine, entering the small town of Amvrosiyivka in five armoured infantry carriers and a truck.

Nine troops were killed in overnight fighting in the streets of a town neighbouring the rebel stronghold of Donetsk, a Ukrainian official said.

Ukraine has claimed that rebels in the east of the country fired rockets and mortars on civilians trying to flee from the region’s intense fighting.

Army troops have penetrated deep inside a rebel-controlled city in eastern Ukraine in what could prove a breakthrough development in the four-month-long conflict, the Ukrainian government said today.

Ukraine said its artillery destroyed part of a Russian armoured column that entered its territory on Thursday night and said its forces came under shellfire from Russia yesterday in what appeared to be a major military escalation between the ex-Soviet states.

Fighting raged yesterday in the eastern Ukrainian city of Donetsk despite a request from the pro-Russian rebels for a ceasefire to prevent a "humanitarian catastrophe." Ukrainian officials demanded that the insurgents surrender instead.

Airstrikes and artillery fire between pro-Russian separatists and Ukrainian troops in the eastern city of Donetsk have brought the violence closer than ever to the city centre as Kiev’s forces move in on the rebel stronghold.

Russia threatened Ukraine with "irreversible consequences" yesterday after a man was killed by a shell fired across the border from Ukraine, an incident Moscow described in warlike terms as aggression that must be met with a response.

Russia’s foreign ministry said that a Ukrainian shell hit a Russian border town, killing one person and seriously injuring two others.

Ukrainian President Leonid Kuchma ordered the foreign and defence ministers today to develop a plan for withdrawing troops from Iraq within six months.