A Ukrainian warplane was blown out of the sky over rebel-held territory Wednesday as fierce clashes between government troops and pro-Russian insurgents left dozens of civilians dead.

Fighting intensified as Kiev appeared to ramp up a deadly offensive to crush the ailing rebellion in the east ahead of a fresh round of diplomacy that will see the presidents of Russia and Ukraine meet next week for the first time in months.

Military spokesman Andriy Lysenko said a Su-25 jet was shot close to the second-largest insurgent bastion of Lugansk, where government forces claim to have battled back control over several districts in the past few days.

Lysenko said it was too early to tell who had shot down the plane -- the latest in a string of military jets to be hit -- or what had happened to the pilot.

Clashes in and around the other major rebel stronghold of Donetsk killed 43 civilians in the past 24 hours, local authorities said.

AFP journalists saw fierce mortar fire tear through the centre of the city close to the state-of-the-art stadium of football team Shakhtar Donetsk, as Ukrainian troops tightened their grip on insurgents holed up in the mining hub.

Street battles were raging in Ilovaysk, a key railway hub some 45 kilometres (30 miles) east of Donetsk, with authorities saying nine soldiers died in the area in the last 24 hours, including a US national who fought for a Ukrainian volunteer battalion.

In the city of Makiyivka, adjoining Donetsk, residents were woken up by shelling in the early hours of Wednesday.

"What bastards," said local 81-year-old Maria Semyonovna, who said she was planning to go out in the morning but was stopped by sounds of explosions.

"We are at home here and they are bombing us," she told AFP. "When is it going to stop? Where can one go?"

The renewed offensive comes as Ukrainian President Petro Poroshenko gears up for a meeting in Minsk with Russia's Vladimir Putin, the heads of Belarus and Kazakhstan, and EU officials next week.

That encounter will come after German Chancellor Angela Merkel jets in to Kiev on Saturday in a show of support for the country's pro-Western leadership.

Poroshenko this week said the army was regrouping to continue its push on the separatist hubs of Donetsk and Lugansk and to fragment the rebel-held territory to stop the flow of weapons from Russia.

- Russian arms flowing? -

Kiev has accused Moscow of ratcheting up arms flows to help bolster the crumbling insurgency as Ukrainian forces have pushed deeper into dwindling separatist territory as they look to roust rebels after four months of fighting that has killing around 2,200 people.

Western powers also fear Putin could be preparing to send in the 20,000 troops NATO says he has massed on the border as a last roll of the dice.

A Ukrainian military spokesman could not confirm claims from a commander in the field that a massive convoy of Russian armour entered Lugansk.

Igor Voronchenko, head of military operations around the city, told local television on Tuesday that tanks, Grad rocket launchers, artillery and over 1,200 fighters were seen entering the city after crossing over from Russia.

Ukrainian forces say they have wrested back control over "a significant part" of Lugansk since the weekend. Residents have endured over two weeks without water and food and authorities have warned of possible infectuous epidemics.

- Fleeing fighting -

At least 415,800 people have fled their homes due to fighting in eastern Ukraine, the UN refugee agency said on Wednesday.

Some 190,000 have been displaced within Ukraine, while 197,400 have fled to Russia and others to Poland and Belarus, said UNHCR, adding that the figures could be higher since there is no centralised registration system.

Meanwhile, Ukraine's teetering economy continued to suffer with the national currency sinking to a record low against the dollar. The hryvnia stood at 13.22 against the dollar as urgent attempts by the central bank to stop the slide failed to calm nerves.

There seemed to be some signs of progress in the week-long saga that has seen some 300 Russian lorries with humanitarian aid parked up at the border with Ukraine's Lugansk region.

Kiev fears that the convoy may be attacked if allowed to cross into rebel territory and could give the Kremlin a pretext to invade.

Russia said on Wednesday that it had agreed with the International Committee of the Red Cross (ICRC) to "begin movement" of the convoy despite worries over safety guarantees.

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