DONETSK, Ukraine — Separatist forces in eastern Ukraine said Wednesday they have almost fully encircled government forces in a town that hosts a strategic railway hub, putting them within grasp of a decisive new victory.
Eduard Basurin, the deputy commander of the separatist forces, said the highway linking the town, Debaltseve, to other government-held areas has now fallen into rebel hands. The encirclement of the town has not, however, been fully executed, Basurin said.
Ukrainian military spokesman Andriy Lysenko confirmed Debaltseve is surrounded on two flanks and is being heavily targeted with Grad multiple rocket launchers. Other officials denied government forces were close to folding and said separatist claims were exaggerated.
Debaltseve is one of multiple flashpoints that have flared up across eastern Ukraine since the start of the month, when full-blown fighting between Russian-backed rebels and government forces erupted anew following a month of relative tranquility. Since the conflict started in April, it has claimed more than 5,100 lives and displaced over 900,000 people across the country, according to Ukraine government estimates.
Advances by separatist forces threaten to definitively torpedo the chances of reviving an internationally brokered peace deal reached in September that established a line of contact between the warring sides. That agreement was signed in the Belarusian capital, Minsk, by rebel leaders and representatives from Ukraine, Russia and the Organization for Security and Cooperation in Europe.
Basurin said the terms of the Minsk agreement are no longer in force.
Roman Turovets, a spokesman for Ukrainian military operations in the east, said fighting is raging all along the more than 300-kilometer (190-mile) long perimeter between government and separatist territory.
Rebel offensives appear addressed at consolidating the viability of the would-be breakaway republics of Donetsk and Luhansk.
Ukraine and NATO accuse Russia of lending vast military support to the rebel cause. But few are suggesting Moscow is doing much to prop up the economy of the self-proclaimed republics, and it shows.
Anecdotal evidence suggests unemployment is rife. Tens of thousands have fled the region, most shops in the main separatist city of Donetsk are closed, and the pace of life in the war-stricken areas is a faint echo of peacetime.
Gaining control of key economic assets is become a pressing goal for the rebel command.
Turovets said Deblatseve is important for its role as a transportation hub.
"Deblatseve is a key railway link without which there can be no real connection between the Donetsk and Luhansk people's republics," he said.
Another spokesman for operations in the east, Leonid Matyukhin, derided rebel claims that the fall of Deblatseve was imminent.
"These are all lies, they are dreams," Matyukhin said. "(The separatists) need to stop smoking whatever it is they are on."
Battles are also raging in areas north of Luhansk city, where government forces have had mixed fortunes in holding back rebel progress in the direction of a large power and heating plant in the town of Shchastya.
The biggest prize of all for separatists, however, would be Mariupol — a port city with a major and lucrative metalwork plant. Artillery duels have been wreaking destruction daily in the countryside east of the city.
The violence reached Mariupol itself last weekend, when rockets crashed into a densely populated eastern district, killing 30 and wounding several dozen. International observers said a preliminary assessment indicated the attack had been mounted from rebel-held areas.
Donetsk separatist leader Alexander Zakharchenko announced ahead of the attack that the rebel advance on Mariupol had begun. But as the scale of civilian deaths in Mariupol started to emerge, Zakharchenko swiftly changed tack and said no attempt would be made to storm the city.
The persisting unrest has dealt hammer blows to Ukraine's economy as a whole. Kiev has hopes foreign assistance could serve to halt its precipitous decline.
Finance Minister Natalie Jaresko said Wednesday that the United States has provided Ukraine with $2 billion in loan guarantees and is promising a further $1 billion following the implementation of reforms.
Jaresko made the announcement after meeting in Kiev with U.S. Treasury Secretary Jacob Lew, who seized the opportunity to commend what he called Ukraine's commitment to taking "difficult steps to unleash Ukraine's economic potential."
"The loan guarantees are provided so Ukraine could handle its social spending and protect those who will suffer from the negative impact that the reforms might have," Lew said.
Ukraine President Petro Poroshenko has said his country will require $15 billion worth of international assistance over the coming two years.
Yuras Karmanau in Kiev, Ukraine, contributed to this report.