Ukraine accused pro-Russian rebels on Monday of hitting a refugee convoy of buses with rocket fire near the eastern city of Luhansk, killing people trapped in the burning vehicles, but the separatists denied responsibility.

Government forces kept up pressure on the separatists in fighting overnight into Monday, blockading or recapturing rebel-held positions after international talks failed to reach agreement on a ceasefire.

Ukrainian military spokesmen said rebel missile fire on the buses had caused an unknown number of casualties.

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"A powerful artillery strike hit a refugee convoy near the area of Khryashchuvatye and Novosvitlivka. The force of the blow on the convoy was so strong that people were burned alive in the vehicles - they weren't able to get themselves out," military spokesman Anatoly Proshin told Ukrainian news channel 112.ua.

Nine Ukrainian troops were killed in the overnight fighting.

A senior rebel leader denied his forces had the military capability to conduct such an attack, and accused the government of regularly attacking the area including with Russian-made Grad missiles.

"The Ukrainians themselves have bombed the road constantly with airplanes and Grads. It seems they've now killed more civilians like they've been doing for months now. We don't have the ability to send Grads into that territory," said Andrei Purgin, deputy prime minister of the self-proclaimed Donetsk People's Republic.

Reports of fresh successes by the Kiev military followed a breakthrough for government forces at the weekend when troops raised the national flag in Luhansk, a city held by the pro-Russian separatists since the onset of the conflict in April.

Despite Western sanctions, the crisis has defied attempts at an international settlement and turned into the worst between Russia and the west since the end of the Cold War.

Russian Foreign Minister Sergei Lavrov said all issues around a humanitarian convoy sent by Moscow to relieve needy areas of eastern Ukraine had been resolved at international talks in Berlin.

But he said no progress had been made in his talks with the Ukrainian, German and French foreign ministers on a ceasefire or a political solution. "We are not able to report on positive results on reaching a ceasefire and on the political process," he told a news conference.

Russia says it would like a ceasefire to allow aid to get to people trapped by the fighting. A 280-truck convoy sent by Russia and carrying tonnes of humanitarian aid has been stalled at the Ukrainian border since last week, as Kiev has insisted on formalities so it can be properly distributed by the Red Cross.

With the rebels now apparently losing ground by the day to government forces and with the leadership of Ukrainian President Petro Poroshenko likely to be keen for a victory by Independence Day next Sunday, it is doubtful Kiev sees any advantage in agreeing to a ceasefire now.

PROBLEMS IN THE RANKS

In a further sign that the rebel leadership may be facing deep problems in its ranks, it said it was setting up military tribunals and bringing in the death penalty for a string of offences including treason, espionage, attempts on the lives of the leadership and sabotage.

The possibility that the rebels might be facing a rout presents Russian President Vladimir Putin, who boosted their ambitions by speaking of the creation of a "New Russia" in eastern Ukraine, with a difficult choice.

If he remains silent and allows their defeat, he risks losing face before the "hawks" at home and the Russian people who have largely applauded Moscow's annexation of Crimea in March. But by trying to maintain pressure on Kiev's pro-western leadership through further support for the rebels, he risks wider economic sanctions from the United States and European Union.

Western nations have imposed sanctions on Moscow including on its financial and energy sectors, and put dozens of Russians close to Putin on a list of targeted individuals.

Russia has retaliated by banning a wide range of U.S. and EU food imports. Vedomosti daily newspaper said on Monday that Moscow might step up its action to include a ban on imports of cars, among other things, if the United States and the EU take additional action against it.

HEAVY DEATH TOLL

The separatist conflict erupted after Russia seized the Crimean peninsula following the ousting of a Moscow-backed Ukrainian president. Separatists occupied key buildings in towns across the Russian-speaking east, declaring "people's republics" and saying they wanted to join Russia.

The United Nations said this month that an estimated 2,086 people, including civilians and combatants, had been killed in the conflict. The death toll has nearly doubled since the end of July, when Ukrainian forces stepped up their offensive as they gained more ground against the rebels.

While calling for surrender by the rebels, Kiev has been steadily tightening the squeeze in their two main strongholds of Donetsk and Luhansk and cutting off their communication lines. The rebels have reshuffled their top leadership with at least two Russians leaving their posts to make room for Ukrainians.

The impression that the rebels are now on the back foot was strengthened by the Donetsk leadership's announcement that it would bring in military tribunals with the right to pass the death sentence on those who committed serious offences such as espionage and sabotage.

The announcement, issued on the Donetsk's rebels website, quoted leading rebel officials as saying that other serious violations including looting would also be dealt with harshly.

"Introducing the death penalty is not revenge, it is the highest degree of social protection," a senior rebel leader,Vladimir Antyufeyev, was quoted as saying.

A military spokesman in Kiev said government forces had pressed the separatists in overnight fighting, encircling the rebel-held town of Horlivka between Luhansk and Donetsk, and taking control of smaller settlements ineastern Ukraine.

A military statement said it suspected the rebels had fired back with a powerful Russian-made Uragan missile system southeast of Donetsk near the village of Novokaterinivka, their first use of the weapon.

It gave no indications of casualties on either side and the rebels made no immediate comment.

"The Russian mercenaries are in panic trying to get out of these places," the Ukrainian military statement said.

The Kiev government has accused Russia, which is opposed to Kiev's pro-Western policies, of allowing a steady flow of tanks, missile systems and armored vehicles to the rebels.

Moscow denies this. It says that the Ukrainian government, with backing from its Western allies, is subjecting thousands of Russian-speakers in eastern Ukraine who reject Kiev's rule to artillery bombardments and shortages of water and power.