Pro-Kremlin rebels announced a major new offensive on Saturday after heavy rocket fire killed at least 30 people in a strategic government-held Ukrainian port linking separatist territory with Russian-occupied Crimea.
The local mayor's office said 97 people were also wounded in the city of Mariupol by dozens of long-distance rockets that smashed into a packed residential district early in the morning and then again shortly after noon.
"Obviously, everyone in the city is very scared," Mariupol native Eduard told AFP.
A fellow resident named Pavlo described dazed survivors helping wounded victims climb out from the concrete rubble of Soviet-era apartment blocks and navigate the shattered glass-covered streets.
"Today, we launched an offensive against Mariupol," Russia's RIA Novosti quoted the self-proclaimed Donetsk People's Republic's leader Alexander Zakharchenko as saying.
But he added a few hours later that his forces were still "saving their strength" and had "conducted no active operations in Mariupol."
His deputy had earlier denied responsibility for the civilian deaths and Zakharchenko did not refer directly to the rocket fire.
But Zakharchenko called the potential capture of the industrial port "the best tribute possible for all our dead."
And a spot inspection conducted by monitors from the Organization for Security and Co-operation in Europe (OSCE) concluded that the Grad and Uragan rocket fire came from two locations "controlled by the 'Donetsk People's Republic'."
Ukrainian Prime Minister Arseniy Yatsenyuk immediately asked the UN Security Council to censure Russia for allegedly spearheading the militants' advance on the biggest pro-Kiev city left standing in the decimated war zone.
Ukrainian President Petro Poroshenko interrupted his attendance at the late Saudi King Abdullah's burial to chair an emergency National Security and Defence Council meeting in Kiev on Saturday.
"We are for peace but also accept the enemy's challenge. We will defend our motherland the way real patriots do -- until a full victory," the pro-Western leader said in statement.
Western leaders watched with worry as violence once again threatened to spiral out of control in what has already been one of the continent's deadliest and most diplomatically-explosive crises since the Cold War.
EU foreign policy chief Federica Mogherini warned in Brussels that the latest escalation "would inevitably lead to a further grave deterioration of relations between the EU and Russia."
The southeastern Sea of Azov city of nearly 500,000 provides a land bridge between guerrilla-held regions to the east and the Black Sea peninsula of Crimea that Russia annexed from Ukraine last March.
"Taking Mariupol is a first step to a broader offensive. It is also an end in itself, anchoring the southern flank in the city," the US-based Stratfor global intelligence company warned in special "red alert" issued to clients.
The rocket strikes "have clearly moved the fighting to a new level, not so much in intensity, but in raising serious questions of strategic intention."
A rebel assault on the port in August saw Kiev repel the attack at a heavy cost that prompted President Poroshenko to agree to a September 5 ceasefire.
That truce was followed by still more clashes that killed at least 1,500 people and was ultimately rejected by the rebels on Friday.
The separatist leader of Donetsk said on Friday he was ripping up the September agreement and launching an offensive aimed at seizing eastern lands still controlled by the pro-Western authorities in Kiev.
His announcement came just a day after his men scored their most symbolic victory to date by flushing out Ukrainian troops from a long-disputed airport in Donetsk that Kiev had clung on to since May.
Western diplomats linked that advance to a new infusion of Russian troops -- firmly denied by the Kremlin -- designed to expand separatist holdings before the singing of a final truce and land demarcation agreement.
Ukraine claimed on Monday that Moscow had poured nearly 1,000 more Russian soldiers and dozens of tanks into the southeast in order to secure control over factories and coal mines that could help the rebels build their own state.
Putin quickly rejected the charges and blamed Kiev for the latest surge in deaths.
"Artillery is being used, rocket launchers and aviation, and it is used indiscriminantly and over densely populated areas," Putin said on Friday.
International monitors said that the average daily death toll has recently approached 30 -- a level last seen at the very height of a nine-month war that has claimed more than 5,000 lives.
Moscow concedes that militias have recently gained more ground than allowed under the September truce terms.
Russian Foreign Minister Sergei Lavrov promised during tense talks with his Ukrainian counterpart this week to use Moscow's leverage with the insurgents to rein in their attacks.
Moscow has not yet responded to Zakharchenko's decision to discard peace talks completely and to launch a new campaign.