Ukrainian fighter jets have bombarded separatists along a broad front, inflicting large losses, the government says, after President Petro Poroshenko pledged "scores and hundreds" would be made to pay for a deadly missile attack on Ukrainian forces.
Andriy Lysenko, a spokesman for Ukraine's "anti-terrorist operation", said there had been 16 flyovers by Ukrainian fighter jets in all.
According to a preliminary assessment, Ukrainian pilots had killed about 500 rebel fighters and damaged two armoured transporters, Lysenko said.
Rebel representatives, quoted by Russian news agencies, denied they had suffered big losses and said the Ukrainians were using outdated intelligence about where the separatist forces were deployed.
The areas shelled on Saturday included the village of Maryinka just outside Donetsk, where residents blamed the Ukrainian army and Poroshenko for killing civilians by shelling residential areas.
The village of about 10,000 people which is under rebel control, appeared to have come under intense fire, with residents telling the news agency Reuters that at least 10 people were killed. Separatists put the number at 30.
Ten multi-storey apartment blocks bore traces of fire, with parts of shells scattered in the street.
Poroshenko, whose forces had recently seemed to be prevailing over the rebels, had pledged on Friday he would "find and destroy" the rebels responsible for the missile attack at Zelenopillya near the Russian border, which killed 23 soldiers and wounded nearly 100 people.
The attack took the gloss off the government's recapture of the rebel stronghold of Slovyansk last weekend.
The Ukrainian military, following the Slovyansk victory, said it had now readied a plan to oust the rebels from Donetsk, a city of 900,000 people where separatist forces have dug in.
Al Jazeera's Scott Heidler, reporting from Donetsk, said the city was "very tense", and many people had already evacuated it in anticipation of further violence.
"In a surreal twist there are quiet streets on a Saturday night but the local people are having a dance for [the separatists] in Lenin Square," he said.
Poroshenko has said the military plan aimed to protect civilians and he had appeared to rule out the use of air raids and artillery to crush the rebels.
In exchanges marking a sharp escalation in the three-month conflict, jets struck at the "epicentre" of the battle against the rebels close to the border with Russia, a military spokesman said.
The planes targeted positions from where separatists using high-powered Grad missiles bombarded an army motorised brigade and killed the 23 Ukrainian soldiers.
Rebel fighters said Ukrainian jets had also carried out raids on Saturday in the eastern town of Horlivka.
"There were a series of powerful explosions. Details are being clarified," Konstantin Knyrik, a separatist representative, was quoted as saying by Russia's interfax news agency.