Ukrainian tanks and fighter bombers have launched a ferocious assault against pro-Russian separatists after rejecting European attempts to save a tenuous 10-day truce.
Ukrainian defence ministry spokesman, Oleksiy Dmytrashkivsky, said on Tuesday that a "massive artillery and air offensive" had been unleashed in the eastern rustbelt - home to seven million mostly Russian speakers.
The separatists' leaders have demonstrated their unwillingness and inability to control the actions of the terrorist units and marauding gangs under their control.
The regional administration of Donetsk, which along with Lugansk has declared its allegiance to Moscow, said four civilians were killed and five wounded when their bus came under fire near the town of Kramatorsk.
Both the rebels and Kiev confirmed a heavy tank battle was being waged near the Donetsk region town of Karlivka and that there were intense clashes in the nearby village of Mariinka.
Al Jazeera's Paul Brennan, reporting from the rebel-controlled eastern city of Kramatorsk, said that residential neighbourhoods were hit by shelling in the early morning of Tuesday.
At least three residential buildings and a school, which residents say served as a shelter, were also hit, our correspondent said.
He said some of the residential buildings were also used as an "impromptu barracks" by pro-Russia separatists.
Our correspondent also reported residents in the Kramatorsk area fleeing the city on buses heading to Russia.
Earlier, President Petro Poroshenko told the nation in an emotional late-night address that his peace plan for Ukraine's worst crisis since independence was being used by the militias to regroup and stock up on heavy arms from Russia.
"After examining the situation I have decided, as commander-in-chief of the armed forces, not to extend the unilateral ceasefire," the 48-year-old said from his office.
"The separatists' leaders have demonstrated their unwillingness and inability to control the actions of the terrorist units and marauding gangs under their control."
Russian President Vladimir Putin said Poroshenko's surprise decision not to extend a ceasefire with separatists meant that he was assuming full "political" responsibility for the renewed military operation in the east of the country.
Poroshenko's decision came just hours after the leaders of France and Germany joined him on a conference call to Putin - the third such conversation in five days.
French President Francois Hollande and German Chancellor Angela Merkel were in rare agreement with Putin that Poroshenko should extend the truce to give indirect talks between separatist commanders and Kiev a chance.
"Unfortunately President Poroshenko took the decision to restart military operations and we - I mean myself and my European colleagues - could not convince him that the road to stable, strong and long-lasting peace does not lie through war," Putin told Russian ambassadors gathered in Moscow.
"Up until now (Poroshenko) was not directly linked to the order to start military operations but now he has taken on this responsibility fully, not only militarily but also politically."
The diplomatic efforts have mostly failed to halt 11 weeks of fighting that have killed more than 450 people and shuttered dozens of coal mines and steel mills whose operation is vital to Ukraine's teetering economy.