Fighting engulfs key city in east Ukraine

DONETSK, Ukraine -- Rifle shots rang out Tuesday in the streets of the largest city in eastern Ukraine and panicked residents fled gunbattles as fighting flared with new intensity after the president ended a cease-fire.

Hopes for peace in eastern Ukraine appeared to sink, as separatist rebels fought to gain ground and disorganized government troops did not seem capable of crushing the mutiny.

The shaky cease-fire had given European leaders 10 days to search in vain for a peaceful settlement, and its end raised the prospect of an escalation in a conflict that has killed more than 400 people since April.

President Petro Poroshenko had called a unilateral cease-fire to try to persuade the rebels to lay down weapons and hold peace talks. Some of the rebels signed onto the cease-fire as tentative negotiations began, but each side accused the other of repeated violations.

In Moscow, Russian President Vladimir Putin argued that substantive talks with representatives in eastern Ukraine had failed to start in earnest and the cease-fire announced by Poroshenko amounted to an ultimatum to the rebels to disarm.

The Russian leader also denounced the Western threat of sanctions as blackmail, adding Moscow wouldn't accept "ultimatums and mentor's tone."

Europe mustn't allow "any unconstitutional coups and interference into the domestic affairs of sovereign states" and should steer clear of "inciting radical and neo-Nazi forces" to avoid destabilization, Putin said.

Russia has cast February's ouster of Ukraine's former pro-Moscow president following protests as a coup conducted by radical nationalists and neo-Nazis.

In Donetsk, the capital of Ukraine's eastern industrial heartland, many streets were deserted and gunfire filled the air Tuesday as rebels besieged the headquarters of the regional Interior Ministry. After a five-hour gunbattle, the rebels captured the compound, leaving the body of a plainclothes police officer outside.

In Kiev, the interior minister said Ukrainian forces had repelled the rebel attack in Donetsk, but an AP journalist on the ground saw that was not the case.

Residents appeared traumatized.

"I was driving and some people appeared with automatic weapons," said Vitaly, who said he was too fearful to give his last name. "They put me and my girlfriend on the ground and then they said: 'Run away from here!'

"I don't know who is fighting whom. We are standing here. We are afraid and shaking."

It wasn't clear what prompted the rebel attack on the Interior Ministry building that houses regional police, who have coexisted with the rebels though they remained subordinate to the central government in Kiev.

The Interfax news agency quoted Sergei Kavtaradze, a spokesman for the insurgents in Donetsk, as saying the attack was launched by militants from the neighboring Luhansk region. There was no way to confirm his claim.

Poroshenko announced the end of the cease-fire late Monday and by early Tuesday the military had made artillery and airstrikes against separatist positions, Defense Ministry spokesman Oleksiy Dmytrashkovsky said.

He said one service member was killed and 17 wounded in the previous 24 hours, and that a military jet was damaged.

There was no comment on any casualties from the rebel side.

Near the village of Karlovka, 30 kilometers (20 miles) northwest of Donetsk, residents told The Associated Press that government forces and rebels began firing heavy weapons at each other across a bridge early Tuesday, just hours after the cease-fire expired.

"There was shooting near the water. Even the water was splattering," said Inna Vladimirovna, who gave only her name and patronymic, fearful of being identified. "We know when they are just shooting to scare and when they are shooting to kill."

Ukrainian troops appeared to score some success Tuesday, with Poroshenko congratulating them on dislodging the rebels from one of the three checkpoints on the border with Russia that they had seized.

European leaders have been pressing Putin to persuade the rebels to lay down their weapons. The West has accused Russia of fomenting the rebellion with troops and weapons.

Russia has rejected those claims, saying that Russians who crossed into the east to fight with the rebels were private citizens. It says its influence with the rebels is limited and urges the Ukrainian government to negotiate directly with them.

Putin warned Tuesday that by ending the cease-fire, Poroshenko had made himself politically responsible for the fighting that began months before he was inaugurated in early June.

Poroshenko held four-way phone talks for hours with Putin, German Chancellor Angela Merkel and French President Francois Hollande in the last two days but said the rebels' failure to meet his conditions made it impossible to extend the cease-fire.

In Brussels, the European Union's 28 governments decided Tuesday they were not ready to hit Russia with a new round of sanctions over Ukraine and put off a decision until Monday, according to an EU official.

That proposal would target those responsible for fomenting unrest in eastern Ukraine, according to a diplomat from a major EU country, and could include travel bans and asset freezes for both individuals and companies. The EU has so far sanctioned only individuals.

Both the EU official and the diplomat spoke on condition of anonymity because they weren't allowed to discuss the closed-door talks publicly.

At the United Nations, Secretary-General Ban Ki-moon strongly condemned "the persistent unlawful violence" by armed militia groups in eastern Ukraine and urged them to lay down their weapons.

"The secretary-general reiterates that a continuation of hostilities can only further exacerbate an already precarious situation," spokesman Stephane Dujarric said.

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Associated Press writers David McHugh in Kiev, Ukraine, Juergen Baetz in Brussels, Vladimir Isachenkov in Moscow and Edith Lederer at the United Nations contributed to this report.