(Bloomberg) — Talks to resolve the conflict in eastern
Ukraine ended without an accord, as fighting continued between
government forces and Russia-backed rebels for control of a
strategic town.

Negotiations in Minsk broke up after three hours Saturday
amid the absence of rebel leaders Alexander Zakharchenko and
Igor Plotnitskiy. Officials from the self-declared Donetsk and
Luhansk republics refused to discuss a cease-fire and withdrawal
of arms, former Ukrainian President Leonid Kuchma said,
according to the Interfax news service.

Separatist representative Vladyslav Deinego said Ukraine
was “delaying a cease-fire and withdrawal of heavy equipment,”
Interfax reported. Separatists want current Ukraine President
Petro Poroshenko to declare a truce before any new talks can
take place, Denis Pushilin, negotiator for the Donetsk rebels,
told reporters.

The meeting Saturday in the Belarusian capital between
Ukraine’s representative Kuchma, Russia’s Ambassador to Ukraine
Mikhail Zurabov, a representative of the Organization for
Security and Cooperation in Europe, Heidi Tagliavini, and the
separatists followed the most serious escalation of violence in
eastern Ukraine since a September cease-fire that has been
largely ignored.

Fighting has deepened the worst standoff since the Cold War
between Russia and the U.S. and Europe, who are threatening to
intensify sanctions for what they say is President Vladimir
Putin’s support of the rebels. Russia denies military
involvement and blames Ukraine for the conflict, which has
killed more than 5,000 people since April, according to the
United Nations.

Rebel Shelling

The Ukrainian National Security and Defense Council, in a
statement on Facebook, said 129 rebels have died and 331 have
been wounded in fighting since Jan. 30.

The separatist-run DAN news service said that Ukraine’s
military lost 97 soldiers on Saturday alone and that 1,439
Ukrainian soldiers have been killed in the last 15 days. The
news service cited the self-declared Donetsk Republic’s defense
ministry.

Ukrainian military spokesman Andriy Lysenko said 15
Ukrainian soldiers were killed and 33 were wounded in fighting
over the past day. Russian regular forces are replacing rebels
in front-line positions and sending arms and vehicles across the
border to the separatists, he said.

Twelve civilians were killed in “non-stop” rebel shelling
of residential areas in Debaltseve, Vyacheslav Abroskin, head of
Ukraine’s Donetsk regional police, said in a statement on
Facebook Saturday. Battles continue near the town, which remains
under government control, Lysenko told reporters in Kiev. Pro-Russian troops control part of the nearby town of Vuhlehirsk,
the Ukrainian Defense Ministry said.

Strategic Town

The Ukrainian Emergencies Ministry said 956 people,
including 161 children, were evacuated from Debaltseve and the
surrounding area from Jan. 28 to Jan. 30. The town lacks water,
power and heat, the ministry said in a statement on its website
Saturday.

The separatists need Debaltseve “to establish a
sustainable control of the territory that they now occupy,”
Otilia Dhand, a Brussels-based analyst at political risk adviser
Teneo Intelligence, said by phone Friday. “It’s a very
important highway crossroads as well as a railway hub. It’s
about communication links and supply lines.”

Putin discussed the worsening situation in Ukraine with
German Chancellor Angela Merkel and French President Francois
Hollande by phone on Saturday, the Kremlin said in an e-mailed
statement.

‘Maximum Restraint’

The Ukrainian, Russian and OSCE representatives had agreed
on a document for discussion in Minsk that included “concrete
steps” for a cease-fire, withdrawal of heavy weaponry, supply
of humanitarian aid and the release of prisoners, the OSCE said
in a statement on its website late Friday. It said last week
that all signatories of September’s Minsk agreements, which
included Zakharchenko and Plotnitskiy, should attend talks to
end the hostilities.

The situation in eastern Ukraine has deteriorated rapidly
in the past 24 hours and an “immediate cessation of
hostilities” is needed, the OSCE’s chairman-in-office, Serbian
Foreign Minister Ivica Dacic, said in a statement Saturday.

The head of the OSCE’s monitoring mission in eastern
Ukraine, Ertugrul Apakan, condemned the shelling of civilian
areas after an attack in Donetsk city and called on all sides to
show “maximum restraint.”

Seven civilians who were gathering to receive humanitarian
aid were killed by rebel shelling in Donetsk on Friday,
Ukraine’s military said on Facebook. Rebel officials blamed
Ukrainian troops, the separatist DAN news service reported.

U.S.’s Kerry

U.S. Secretary of State John Kerry will take a personal
hand in efforts to reduce tensions next week, traveling to Kiev
Feb. 5 to talk with officials including Poroshenko. He plans to
meet Russian Foreign Minister Sergei Lavrov while at a security
conference in Munich from Feb. 6-8, State Department spokeswoman
Jen Psaki told reporters in Washington on Friday.

A convoy of trucks carrying what the Russian Emergencies
Ministry says is humanitarian aid arrived in Makeevka, eastern
Ukraine, on Saturday, state-owned Tass news service reported.
Ukraine says such convoys cross the border illegally and are
being used by Russia to deliver arms and troops to separatists.

To contact the reporters on this story:
Kateryna Choursina in Kiev at
kchoursina@bloomberg.net;
Aliaksandr Kudrytski in Minsk, Belarus at
akudrytski@bloomberg.net

To contact the editors responsible for this story:
James M. Gomez at
jagomez@bloomberg.net
Alex Wayne, Nancy Moran