Russian-backed rebels advanced to encircle a Ukrainian army garrison town yesterday in a new offensive that has again unleashed all-out war after a five-month ceasefire and brought threats of new Western sanctions against Moscow.

The US and the EU are considering new measures after accusing Russia of openly supporting the latest rebel advance with money, arms and troops on the ground.

Ambassadors of Nato countries and Ukraine met in Brussels yesterday to discuss a response to the fighting, their first such emergency meeting since August.

Pro-Russian rebels in Ukraine are fighting for territory the Kremlin calls ‘New Russia

Moscow denies playing a military role. Russian President Vladimir Putin accused Kiev of prolonging the conflict by refusing to talk to the rebels.

The government in Kiev ordered a state of emergency across the two rebel-dominated provinces and placed all Ukrainian territory on high alert. Its military said seven Ukrainian soldiers had been killed and 24 wounded in intensified clashes in the past 24 hours, with heavy fighting at Debaltseve, a small town the rebels have vowed to encircle to safeguard their main strongholds.

Violence in eastern Ukraine is at by far its worst since a ceasefire was agreed last September. Casualties have mounted, including in the big government-held port of Mariupol where Kiev says 30 civilians were killed in rebel shelling on Saturday.

After months during which the truce was punctured by small-scale skirmishes on the front line, rebels fighting for territory the Kremlin calls “New Russia” said they were left with no choice but to launch an advance. Their main aim, they say, is to push back government forces that had been shelling rebel-held cities.

The Kiev government sees the rebel advance as a repudiation of the ceasefire, restarting a war in which 5,000 people have been killed. Kiev and Nato believe thousands of Russian troops are in eastern Ukraine fighting on the rebels’ behalf with advanced weapons, despite Moscow’s denials.

“Rebels are constantly attacking Ukrainian government positions across the conflict zone with artillery, mortars, grenade launchers, tanks,” Kiev military spokesman Volodymyr Polyovy said. The rebels are targetting Debaltseve, a town with a population of 26,000 that straddles the main road and train line between the two principal rebel strongholds, Donetsk and Luhansk. They say the government garrison there allows Kiev’s guns to menace civilian areas.

“Look on the map. There is a so-called ‘Debaltseve tongue’,” separatist deputy commander Eduard Basurin told Reuters by telephone, referring to a kink in the frontline where the government holds the town. The rebel goal is “to push government forces further back from us, from settlements, and straighten the front line,” he said. He denied that the rebels had launched any assault on Mariupol, the port of 500,000 people which is by far the biggest government-held city in the two rebel dominated provinces. “We have no offensive there. On the city itself – absolutely none.”

Ivan, a 35-year-old who fled Debaltseve months ago but spoke earlier yesterday to relatives inside the town, said it was almost entirely surrounded by the rebel advance.

He added,“Ukrainian troops are still holding on in the town, but the question is how long they can hold on without more support.”

The military has reported civilian casualties at Debaltseve without giving any figures.

It remains to be seen how far the rebels intend to push their advance. Western governments that suspect the Kremlin’s hand is behind the rebels have long said they believe Putin’s goal is a stable “frozen conflict” on Ukrainian territory.

If so, the present advance may be intended mainly to push government troops further from Donetsk and Luhansk, to make those two strongholds more secure.

Mariupol could also be a tempting prize: capturing it would link rebel-held Donetsk with the sea and Crimea, a peninsula annexed by Russia last year. But any battle for the large port would involve urban warfare on a scale unprecedented so far in the conflict. Rebels halted at Mariupol’s gates during their last big offensive, before the ceasefire in September.

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