Artillery shells slammed into the outskirts of the Ukrainian city of Donetsk yesterday as government forces tightened the noose around the rebel-held redoubt and called on pro-Russian separatists to surrender.

To the east of Donetsk, government forces and the separatists were fighting for control of the town of Krasny Luch, a rail and road junction through which Kiev says the rebels are receiving supplies of Russian military equipment.

Talk of a ceasefire, a possibility raised by a separatist leader on Saturday, evaporated as Kiev government forces kept up an offensive to crush the rebels.

US warns Russia not to misuse humanitarian plight

Ukrainian military spokesman Andriy Lysenko said if the rebels wanted a ceasefire this meant “raising white flags and putting down their guns”.

There would be no truce while the Ukrainian army continued “punitive” military action, the rebels retorted in a statement.

Donetsk, a major industrial hub in Ukraine’s Russian-speaking east, resonated with the crash of shells on its outskirts for about eight hours up to midday yesterday, a Reuters witness in the town said.

In the city’s northern district of Putilovka, a building housing the offices of Ukrtelecom telecommunications company was ablaze, apparently hit by a shell.

Residents had come out to watch, while one man was putting up corrugated metal to protect the windows of his home. Lysenko said in the past 24 hours, the military had “continued successful offensive operations, considerably tightening the circle around the capital of the Donbass, Donetsk”.

He added: “The (separatist) fighters are in panic and chaos. There are numerous cases of desertion among the terrorists.”

Neither he nor the rebels gave any indication of casualties in the fighting over the weekend. A statement on the Facebook page of rebel commander Igor Girkin, known as Strelkov (The Shooter), said: “They have been bombing all morning. There are explosions, some close, some far off. There is news coming in all the time by phone.

“Just now, we had a fire near hospital No 18, a woman has been killed...”

Accusing the Ukrainians of maintaining “punitive” operations that endangered people in Donetsk and threatened a humanitarian catastrophe, a later rebel statement said: “As long as the Ukrainian army is continuing military action there can be no ceasefire.”

Ukraine and its Western allies accuse Russia of orchestrating the separatist revolt which erupted in April after Russia’s annexation of Ukraine’s Crimea peninsula.

It says Russia is funnelling tanks and missile systems to the rebels, who have declared independent “people’s republics” in the two main industrial regions. Moscow denies involvement.