Pro-Russian separatists have vowed to push ahead with their latest offensive in eastern Ukraine after aborting peace talks with Kiev.

Rebel delegates called off peace talks with Kiev's pro-western leaders on Friday, while at least seven civilians were killed by shelling in the rebel-held city of Donetsk.

Donetsk rebel representative, Denis Pushilin, insisted that the rebels' ongoing offensive was a way to protect the civilians from Ukrainian artillery fire and said they would go ahead with it unless Kiev stopped shelling rebel-held areas.

"The situation has worsened and it is forcing us to go on offensive,''

Pushilin said they would be ready to resume the ceasefire that was brokered in September and withdraw heavy weaponry, but the demarcation line would have to take into account the rebels' recent advance.

Under a plan brokered last week, Ukraine and pro-Russian separatists would pull back their heavy arms 15km on either side of the line, though there was no agreement on a withdrawal of all troops.

Heavy fighting was also reported around Debaltseve, a key government-held town of 25,000 people that was built around a railroad connecting the two rebel centres of the Russian-speaking southeast.

Donetsk insurgency commander Alexander Zakharchenko told Russian state television that Ukrainian troops in the town were "surrounded" and unable to receive supplies or send their wounded for treatment in regional hospitals.

As the talks collapsed on Friday, the US State Department announced Secretary of State John Kerry will visit Kiev next Thursday for talks with President Petro Poroshenko and other Ukrainian officials.

"The secretary's visit will highlight the United States' steadfast support for Ukraine and its people," the State Department said in a statement.

Western governments and Ukraine accuse Russia of arming and training the rebels, who are deploying extensive sophisticated and heavy weaponry, including tanks and multiple rocket launchers.

Russia denies aiding the rebels who claim to get all their weaponry from captured Ukrainian supplies.

Source: Agencies