Ukraine's military is "unsuited" to the current conflict against pro-Russian separatists and needs more armoured vehicles and artillery rockets, a British defence think tank said on Wednesday.

Regularising volunteer battalions that have played a key role in the fighting will also be a "significant challenge", the International Institute of Strategic Studies said in its 2015 Military Balance report.

"Tactics and doctrines that had dominated since the 1990s, mainly inherited from the Soviet era, have generally been unsuited to the current fighting amid urban areas and among populations," it added.

"Only a small proportion of the army and air forces are combat ready," it said.

It pointed out that Ukraine was using older equipment to replace losses incurred in the conflict but that longer term it would need more modern material.

This could include mine-resistant ambush-protected vehicles, and equipment such as precision artillery rockets which the report had been effective last year.

The think tank cautioned against announced drastic increases in Ukraine's defence spending.

Spending is planned to rise to 5.0 percent of gross domestic product by 2020, but this could prove unrealistic, the IISS indicated.

Fighting in recent weeks has been heavy as pro-Russian rebels pushed into territory held by the Ukraine government.

Kiev forces have suffered a series of setbacks on the frontlines in southeast Ukraine, including the loss of Donetsk airport.

At least 48 people were reported killed in the immediate run up to a summit in the Belarussian capital Minsk, at which the leaders of France, Germany, Russia and Ukraine were to meet in a bid to hash out a peace deal.

- Incompatible demands -

US President Barack Obama has said he will consider sending arms to Ukraine if diplomacy fails, while Britain has said it will keep the option "under review".

But Ben Barry, senior fellow for land warfare at IISS, said Ukrainian forces would need time to train to use advanced weaponry, and that any upgrades would quickly be matched by Russia.

"To a certain extent, what the Ukraine forces have to do is equivalent to modifying a car whilst it's driving. Fighting and also trying to build up your forces is not easy," Barry said.

A sticking point in peace negotiations is whether a new deal will extend rebel control over 500-square kilometres (200-square miles) of territory seized over the past month.

Moscow wants the separatist-held areas to be granted significant autonomy, while Kiev wants to re-establish control over 400 kilometres (250 miles) of its border with Russia.

Nick Redman, IISS senior fellow for geopolitical risk and economic security, said any agreement would struggle to find balance between rival demands.

"I think it's reasonable to assume that the Russians are going to want an explicit guarantee about Ukraine not being in NATO and this is very difficult for Western nations to countenance," Redman said.

"What Ukraine wants and what the separatists want are incompatible. So the question really is which side is going to have to give on some of their key interests."

Ukrainian President Petro Poroshenko has said he will impose martial law in the country if the Minsk talks fail to stop the conflict, which has killed at least 5,300 people in 10 months of fighting.