Ukraine's new Western-backed leader sought urgent talks with Russian President Vladimir Putin on Wednesday after rebels shot down an army helicopter despite ceasefire orders from their own commander to observe a fragile truce.
The death of nine servicemen outside the pro-Russian stronghold city of Slavyansk and loss of two other soldiers in attacks by separatist gunmen prompted Ukrainian President Petro Poroshenko to threaten to unleash a powerful new military campaign in the industrial east.
An AFP team in Slavyansk heard a new wave of shelling being launched by Ukrainian forces who have effectively surrounded the devastated city of nearly 120,000 Wednesday morning.
Their push was met with extended rounds of anti-aircraft and heavy machinegun fire that echoed through deserted city streets.
"This is the calm before the storm that begins once the ceasefire ends," said a 42-year-old rebel who is simply known to his unit as "Oleksandr the Soldier".
Poroshenko's threat of retaliation dealt a crushing blow to budding hopes of the sides mediating an end to 11 weeks of fighting that has killed more than 435 people and brought the ex-Soviet nation to the brink of collapse.
Kiev's temporary ceasefire was picked up by separatist commanders on Monday but was due to expire on Friday morning after just one round of inconclusive and indirect talks.
Putin urged both sides to extend the truce and further asked parliament to revoke his March 1 authorisation to invade his western neighbour in a self-proclaimed bid to "protect" ethnic Russians from the nationalists now in power in Kiev.
The Kremlin said Putin was seeking to encourage dialogue that could help bridge the worst standoff in East-West relations since the Cold War.
But Kiev and Washington accuse Putin of covertly arming the rebels in retaliation for the February ouster of a pro-Russian administration that abruptly ditched an historic EU agreement and preferred closer ties with Moscow instead.
Poroshenko will sign the final chapters of that pact in Brussels on Friday despite Kremlin threats to follow up a cut in gas deliveries it imposed on June 16 with punishing trade restrictions.