UKRAINE - The ceasefire in Ukraine hung by a thread Wednesday after President Petro Poroshenko accused pro-Russian rebels of endangering the peace process and ordered troop reinforcements to eastern cities.
In another sign of how far apart the two sides are drifting, Prime Minister Arseniy Yatsenyuk announced he was cutting the rebel-held Donetsk and Lugansk regions off from central government subsidies, so as not to finance "terrorists."
Artillery explosions could be heard early Wednesday around the airport in Donetsk, where Ukrainian soldiers have been holding out for weeks against surrounding separatist forces.
Following salvos of Grad multiple rockets and cannon fire, black smoke rose from the nearby government-held village of Peski.
Ceasefire observers representing government forces, rebels, Russia and the European security body OSCE were due to meet later to "discuss a possible path to a ceasefire in the area of the airport," a spokesman for the Ukrainian military said.
But the already tattered truce, which was signed Sept 5, has looked ever more fragile since rebels defied the government Sunday and held leadership elections that they described as legitimising their two self-declared independent states.
"The firing has intensified," the Ukrainian military's spokesman said.
"Also, the delivery of significant amounts of military hardware and personnel from Russia to territory controlled by rebels hasn't stopped," the spokesman said, reiterating constant allegations - denied by Moscow - that Russia is fighting on the rebel side.
Ukrainian authorities say they are preparing for the worst, following rebel threats to expand their territory.
Poroshenko said late Tuesday that he had ordered troop reinforcements to cities across the east to guard against a "possible offensive in the direction of Mariupol, Berdyansk, Kharkiv and Lugansk."
"We are obliged as the Ukrainian state not to allow the spread of this cancerous tumour, to ensure the blockade of this territory," he said at a meeting with defence chiefs.
"Today, several new units and groupings have been formed, which will already allow us to stop any possible attack," Poroshenko said.
"The supplying of our armed forces with the very latest technology - offensive, reconnaissance, guided systems - is continuing quite effectively."
Autonomy offer axed
Russia said it "respected" the rebel elections, but Kiev, the European Union and United States all said that the polls had badly damaged the peace process, which was based on giving rebel areas autonomy, not independence.
As a result, Poroshenko said, he was asking parliament to rescind the law on offering autonomy to the rebels, who are based around the cities of Donetsk and Lugansk.
The separatists adopted a conciliatory tone Wednesday, saying that they were ready to try and resurrect the peace process. "We are prepared to work on a new version of the agreement," said the self-declared Donetsk and Lugansk people's republics in an unusual joint statement.
But Yatsenyuk likewise signalled the government was taking a tougher line, announcing an end to subsidies for the eastern regions. "We don't want to finance imposters and conmen," he said.
"As soon as the terrorists clear out of there and we get back the territory, then we will pay every person the welfare payments they have the right to."
"To pay today is to directly finance terrorism," he said.
"The terrorists should get out of this territory and Russia should stop supporting them."
Gas and power supplies will continue, he said.
"Our citizens are on this territory and the government will not allow these people to freeze, because this would lead to humanitarian catastrophe." Ukraine's small army has been badly mauled during the more than half-year of battles.
NATO chief Jens Stoltenberg said on Tuesday in Brussels that Russia continues to arm, train and support the rebels, with special forces inside Ukraine and more troops detected moving troops along the border.
Analysts say the Ukrainian government's biggest fear is the threat of an offensive by Russian-backed separatists to capture Mariupol and then push along the coast to establish a land corridor linking Russia to Crimea - another Ukrainian region, which was invaded and annexed by Russia in Mar.