Ukrainian troops claimed fresh gains Monday around one of the main remaining separatist strongholds as Moscow reportedly weighed up "targeted" cross-border strikes following the alleged deadly shelling of a Russian town.
Ukraine's Western-backed President Petro Poroshenko said government forces had managed to break through a blockade by pro-Moscow rebels to reach soldiers camped out at the strategic airport in the insurgent-held bastion of Lugansk.
The industrial hub of some 425,000 people is the capital of one of the rebels' two self-declared "People's Republics" and -- along with million-strong Donetsk -- now finds itself in the crosshairs of Kiev's reinvigorated military push to quash the three-month insurgency tearing apart the ex-Soviet state.
The defence ministry said Monday that Ukrainian jets carried out five air strikes against separatist positions close to Lugansk but there was no confirmation of rebel claims that Kiev had massed tanks in the outskirts ahead of a major push into the city.
Local authorities said three people were killed and 14 wounded in various incidents around the city over the last 24 hours, adding to a bloody weekend that saw one of the highest two-day civilian tolls so far in the conflict that has now claimed some 550 lives.
Ukraine's army has also seen its losses spike in recent days after militias that the West and Kiev allege are being armed by the Kremlin killed 19 soldiers and wounded 100 more in a multiple-rocket attack late Friday.
The military losses have profoundly dented emerging hopes in Kiev that its recent string of battlefield successes had finally convinced the rebels to sue for peace.
And the conflict risked spiralling even further amid reports that Moscow was considering strikes against Ukrainian positions after a shell allegedly crossed the border and killed a Russian civilian on Sunday.
Well-connected Russian daily Kommersant cited a source close to the Kremlin as saying that Moscow was weighing up "targeted retaliatory strikes" but was not planning any large-scale action.
"Our patience is not limitless," the source said, adding that Russia "knows exactly where they (Ukrainians) are firing from".
Moscow has repeatedly accused Ukrainian forces of shelling across the border but Sunday's incident saw the first claim of a fatality and the Russian foreign ministry warned the incident risked "irreversible consequences".
Kiev has denied that its forces were behind the shelling and Poroshenko called Sunday on the West to condemn "attacks by Russian soldiers of positions held by Ukrainian servicemen" in a phone conversation with EU Council President Herman van Rompuy.
Poroshenko has previously vowed to kill "hundreds" of gunmen for every lost soldier and ordered an airtight military blockade of Lugansk and Donetsk.
European leaders responded by joining forces with Russian President Vladimir Putin in a bid to persuade Poroshenko to put the brakes on violence first sparked by the February ouster of a Kremlin-backed president and fanned by Russia's subsequent seizure of Crimea.
Hopes of a truce rested on a meeting between Putin and Poroshenko -- the second since the Ukrainian president's May election -- that seemed on the cards on the sidelines of the World Cup final in Rio de Janeiro.
But the Ukrainian presidency said Sunday that Poroshenko was forced to cancel his attendance "considering the situation currently happening in Ukraine".
Putin instead met German Chancellor Angela Merkel for talks the Kremlin said ended with a call on the warring sides to issue "a statement as soon as possible concerning a ceasefire, a prisoner swap, and the return of (international) monitors" to eastern Ukraine.
A German government spokesman said Putin and Merkel suggested that Kiev and the separatists could launch their discussions by video conference.