Ukraine's rebels disavowed a new truce on Sunday hours after it took effect, saying it did not apply to the town where most fighting has taken place in recent weeks.
Guns fell abruptly silent at midnight across much of eastern Ukraine in line with the ceasefire agreement, reached after a week of diplomacy led by France and Germany. But pro-Russian rebels announced they would not observe the truce at Debaltseve, where Ukrainian army forces were encircled.
"Of course we can open fire (on Debaltseve). It is our territory," senior rebel commander Eduard Basurin told Reuters. "The territory is internal: ours. And internal is internal. But along the line of confrontation there is no shooting."
The Organization for Security and Cooperation, responsible for monitoring the ceasefire, said rebels had denied its observers access to Debaltseve. It said firing continued in the town, one of a few exceptions to a truce that was otherwise largely being observed.
Both sides blamed what firing there was on the enemy. But Debaltseve has been the focus of fighting for weeks, and it will be hard to speak of a truce if Ukrainian troops remain trapped there under fire, or the rebels press on with their advance.
Kremlin spokesman Dmitry Peskov said Thurday's peace deal including the truce must be implemented "unconditionally". But he made no mention of whether Moscow believed the truce applied to Debaltseve, and declined to comment on Basurin's remarks.
Reuters journalists heard volleys of artillery from the direction of Debaltseve in the morning after a night that had been mostly quiet.
Town almost cut off
Ukrainian forces have for weeks been holding out in the town, which sits astride a railway junction in a pocket between the two main rebel strongholds.
Rebels say they have completely encircled the town, but Ukraine says its forces have kept open a road to resupply it in the face of a Russian-backed onslaught.
Kiev military spokesman Andriy Lysenko said Ukrainian forces had foiled an attempt to close the circle in the last 24 hours.
Washington says regular Russian forces armed with tanks and missile launchers advanced on the town from all sides in the days before the truce.
Reuters journalists operating on the rebel side have seen armored columns of troops without insignia arriving in the area in recent days.
In the main rebel center, Donetsk, Reuters journalists said artillery had been exploding every few seconds in the hours before the ceasefire, but halted abruptly at midnight.
A Reuters photographer in government-held territory also said constant bombardment had halted overnight, although he heard a volley of artillery around 7 a.m. from the direction of Debaltseve.
A Ukrainian military spokesman said the ceasefire was being "generally observed". Its forces had been shelled 10 times since the truce took effect in "localized" incidents, and no soldiers had been killed.
A Ukrainian staff officer stationed near Debaltseve said: "The general level (of attacks) has decreased, although there are violations."
Ukrainian President Petro Poroshenko, wearing the uniform of the armed forces' supreme commander, announced the order to stop firing in a midnight televised address, but said there was still alarm over Debaltseve.
"I very much hope that the last chance to begin the long and difficult peaceful process for a political settlement will not be wasted," he said, adding, however, that if Ukraine were slapped, it would not "turn the other cheek".
The ceasefire, negotiated in all-night four-power talks on Thursday, foresees creation of a buffer zone and withdrawal of heavy weapons. More than 5,000 people have been killed in a conflict that has caused the worst crisis in Russia-West relations since the Cold War.
Russian President Vladimir Putin denies Moscow is involved in fighting for territory that he calls "New Russia" but Washington and its allies have imposed economic sanctions over Russia's role in the conflict.
U.S. Secretary of State John Kerry urged implementation of the ceasefire in a telephone call with his Russian counterpart Sergei Lavrov and expressed concern about efforts by Russia and the separatists to cut off Debaltseve.
U.S. President Barack Obama expressed "deep concern" about the violence around Debaltseve prior to the ceasefire in a telephone call with Poroshenko, the White House said. Obama also spoke to German Chancellor Angela Merkel.
It was Merkel who negotiated the truce along with President Francois Hollande of France at talks with Poroshenko and Putin. The Kremlin said the four leaders would continue to speak by phone.
Maxim, a rebel fighter at a checkpoint on a road from Donetsk to government-held Dnipropetrovsk, said he did not expect the ceasefire to hold.
"Truce? I doubt it. Maybe two to three days, and then they will start shooting again. This is all for show. The OSCE is driving around here, so of course they are being quiet."