Ukrainian troops are trying to defend the key transport hub of Debaltseve At least 40 people have been reported killed as fighting between Ukrainian troops and pro-Russian rebels rages on in the east of the country.
Ukrainian officials say 15 soldiers and 12 civilians died in the past 24 hours. The rebels report 13 casualties.
The separatists also claim to have seized the town of Vuhlehirsk and surrounded the key hub of Debaltseve, but the Ukrainian military denies this.
Meanwhile, urgent truce talks began in Minsk, the capital of Belarus.
Representatives of Ukraine and Russia, as well as rebel envoys and members the Organization for Security and Co-operation (OSCE), are taking part in the meeting.
They are due to discuss proposals for an immediate ceasefire, a pullout of heavy weapons from the line of contact and a prisoner exchange.
The recent heavy fighting has left a September ceasefire - also agreed in Minsk - in tatters.
'Displacement and suffering'
The latest report on the situation in the conflict zone stood in stark contrast to the concept of a ceasefire.
On Saturday, Ukrainian Defence Minister Stepan Poltorak told reporters that "15 soldiers were killed and another 30 injured" during the fighting on the "whole line of contact" in the past 24 hours.
Video showed pro-Russian rebels under fire in Vuhlehirsk on Wednesday night
He also admitted that Debaltseve was now "partially controlled" by the rebels.
Meanwhile, Vyacheslav Abroskin, head of the Ukrainian Interior Ministry in the Donetsk region, said 12 people were killed by rebel shelling in the town.
In the rebel stronghold of Donetsk, Eduard Basurin, deputy commander of the self-proclaimed Donetsk People's Republic, said 13 people - including civilians - were killed in the past 24 hours in the areas held by the separatists.
He also claimed that some 8,000 Ukrainian troops were now surrounded in and around Debaltseve.
Ukrainian officials earlier denied the claim.
In a statement, Ertugrul Apakan, the chief monitor of the OSCE mission in Ukraine, condemned the shelling of densely populated civilian areas in eastern Ukraine.
"Yet again, innocent civilians have been impacted by the crisis, and yet again we are seeing more bloodshed," Mr Apakan said, urging all sides "to prevent further displacement and suffering".
Sanctions debate
On Thursday, EU foreign ministers agreed to extend existing sanctions against Russia until September.
At an extraordinary meeting in Brussels, they also agreed to discuss names to add to the list of individuals targeted for EU travel bans and asset freezes.
However, they did not agree on imposing new economic sanctions against Russia.
Terrified civilians have been leaving Debaltseve in the past several days 
The rebels have been steadily advancing on Ukrainian positions in recent days 
Residents in the rebel stronghold of Donetsk say they are running out of essential supplies Thursday's EU meeting was called after the government-held port of Mariupol in Ukraine was shelled last weekend, with the deaths of at least 30 people. Ukraine blamed the rebels for the attack.
The government in Kiev and Nato say hundreds of Russian tanks and armoured vehicles are in eastern Ukraine.
Moscow denies direct involvement but says some Russian volunteers are fighting alongside the rebels.
More than 5,000 people have been killed and some 1.2 million have fled since the rebels seized a big swathe of Luhansk and Donetsk regions last April, following Russia's annexation of Crimea.
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