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Intense artillery exchanges between Ukrainian government forces and Russian-backed separatists have persisted around a strategic town in eastern Ukraine – fighting that threatens to dash a ceasefire deal brokered by European leaders last week.

Under an agreement negotiated by the leaders of Ukraine, Russia, Germany and France, the warring sides are to begin withdrawing heavy weapons from the front line today.

That plan already looks at risk, with the rebels saying they are not satisfied that conditions are in place for the process to go ahead.

Reporters in Luhanske, a government-held town nine miles north-west of the bitterly contested railway hub of Debaltseve, heard sustained shelling yesterday.

Some of the artillery appeared to be outgoing, suggesting it was being fired by Ukrainian troops.

Debaltseve, still in government hands, remains in contention despite the ceasefire. The rebels insist the town should revert to their control because they have encircled it. A loaded Grad rocket launcher was seen pointing in the direction of Debaltseve, but it was not fired while journalists were present.

Observers from the Organisation from Security and Cooperation in Europe, who are supposed to monitor the ceasefire, said separatists had denied them access to Debaltseve.

Despite the ceasefire coming into effect early on Sunday morning, five Ukrainian troops were killed and 25 were wounded in
 the past 24 hours, Ukrainian military spokesman Andriy Lysenko said.

Separatist military official Eduard Basurin said the government had lobbed artillery at Horlivka, a town under rebel control.