US President Barack Obama has urged his Russian counterpart Vladimir Putin in a phone call to agree to a peace deal with the Ukrainian government.

"If Russia continues its aggressive actions in Ukraine, including by sending troops, weapons, and financing to support the separatists, the costs for Russia will rise," said a statement issued by the White House on Tuesday.

The Kremlin, however, emphasised in its statement about the call that the Ukraine crisis was an "internal" conflict.

Kiev and the West accuse Moscow of supplying and training the heavily armed separatists, but Russia denies the claims. 

Peace efforts

The leaders of Ukraine, Russia, Germany and France are set to meet for the peace talks in the Belarusian capital of Minsk on Wednesday.

French President Francois Hollande said the leaders were heading to the talks "with the strong will to succeed, but without being sure that we will be able to do it".

German Foreign Minister Frank-Walter Steinmeier said simply holding the summit was no guarantee of success, and that nothing had been resolved yet.

Meanwhile, Ukrainian President Petro Poroshenko said the talks were "one of the last" opportunities for ending the conflict that has killed more than 5,300 people since April.

The renewed fighting has brought calls in the West for more pressure against Moscow. Obama is weighing whether to deliver lethal weapons to Kiev.

Fresh fighting in Ukraine threatens peace talks

Obama met German Chancellor Angela Merkel on Monday but announced no decision on weapons, despite several senior officials in his administration coming out last week in favour of sending arms.

European countries have opposed sending arms to Kiev, arguing that would escalate the war.

Latest violence

Meanwhile on Tuesday, rockets crashed into the eastern Ukrainian city of Kramatorsk, about 50km north of the front line, hitting the headquarters of the Ukrainian military campaign in the east, as well as nearby residential areas.

The government-controlled Donetsk regional administration said 12 people were killed and 64 wounded, including 29 civilians. At least seven of the dead were civilians, local officials said. 

The rebels denied firing on the town.

At the front line in Vuhlehirsk, a small town captured by rebels last week, volleys of artillery crashed in both directions. The rebels are pushing to encircle government forces, holding out in nearby Debaltseve, a rail hub that is the main rebel target.

Rebels sounded triumphant and said they had no intention of halting their offensive.

"The Debaltseve bubble has been shut firmly. We will not let them out. There is no way they can get out," said a commander of a reconnaissance unit.

Asked about a ceasefire, the commander replied: "We are absolutely against it. They will have time to regroup. We have them now."

Source: Al Jazeera and agencies