Rebel Strongholds on Edge as Kiev Shrugs Off Calls for Truce

Rebel strongholds in eastern Ukraine braced for more fighting on Wednesday as European leaders prepared to pile new pressure on President Petro Poroshenko for a truce with pro-Russian separatists.

French President Francois Hollande and German Chancellor Angela Merkel were expected to push the Western-backed leader on a ceasefire in three-way telephone talks but Kiev has until now shrugged off calls to halt an offensive that has reclaimed a string of key rebel towns.

In Lugansk -- one of two regional capitals still held by the insurgents -- the streets were deserted and an AFP team heard regular artillery fire to the north of the city with shooting seeming to be focused around the rebels' military headquarters.

"Let them bomb us, let them kill us," said a distraught local resident called Olga. "We have nowhere to go. Where could we go?" asked her husband Yevgeny.

Still, the couple were trying to get their young son out of town -- saying he was too scared to sleep at night.

Three people were killed in the city and five injured in the past 24 hours, local authorities said.

Another three servicemen were killed and four injured in clashes across east Ukraine in the same period, Kiev's National Security and Defense Council said Wednesday.

In the main rebel-held industrial hub of Donetsk the situation remained calm despite airstrikes Tuesday on a rebel position in its western outskirts, with public transport working and some shops still open.

Ukraine's military says it controls all routes in and out of Donetsk and Lugansk and defense council spokesman Andriy Lysenko warned a plan was in place that would give the rebels an "unpleasant surprise."

Dressed in military fatigues Poroshenko pledged to win back the two cities "very soon" during a lightning visit Tuesday to the vanquished rebel bastion of Slavyansk, abandoned by rebels last week in the face of a government onslaught.

Following the retreat rebel military chief Igor Strelkov -- whom Kiev accuses of being a Russian intelligence officer -- said the insurgents are working fast to boost their weak defenses around Donetsk and bolster their numbers.

"We are taking urgent measures to prepare Donetsk for battle," Stelkov was reported as telling the insurgents' TV station Wednesday by Russia's state ITAR-TASS news agency.

Poroshenko -- who signed a historic political and trade deal with the EU last month -- tore up a 10-day ceasefire on July 1 because of uninterrupted rebel attacks that claimed the lives of more than 20 Ukrainian troops.

Uneasy EU leaders are hoping that a new truce and a Kremlin promise not to meddle can take pressure off the bloc to adopt sweeping sanctions that could damage their own strong energy and financial bonds with Russia.

The Kremlin has been unusually restrained since the string of military advances by Kiev with analysts saying Putin could be distancing himself from the rebels despite calls from hawks to send troops across the border.

Russia's Foreign Minister Sergei Lavrov reiterated calls from Moscow for Ukraine to sit down with the rebel leaders without "conditions".

"They (the rebels) are not ready to fulfill Kiev's ultimatums to capitulate and lay down their arms before negotiations begin," Lavrov said at a press conference with Italian Foreign Minister Federica Mogherini.

The Italian minister was visiting Moscow after Rome took over the EU's rotating presidency and was to discuss the Ukraine crisis with President Vladimir Putin later Wednesday.

Washington meanwhile has consistently backed the stepped-up campaign being waged by Ukrainian troops and irregular forces since Poroshenko's promise after his election in May to quash an uprising that has cost nearly 500 lives and inflamed East-West ties.

The United States views Ukraine's territorial integrity as vital to European security and important to halting Putin's seeming ambition to resurrect a tsarist or post-Soviet empire.

Poroshenko on Tuesday dismissed the man who had headed Kiev's self-proclaimed "anti-terrorist operation" since its launch on April 13 and replaced him with Vasyl Grytsak -- a career security service officer.

The reshuffle was one of several in the Ukrainian Security Service (SBU) and appeared to represent an attempt by Poroshenko to place trusted associates in top positions rather than any change in tactic in the campaign.