The Kremlin said on Wednesday President Vladimir Putin and Ukrainian leader Petro Poroshenko had agreed on steps towards peace in eastern Ukraine but a ceasefire had not been agreed between Moscow and Kiev because Russia is not a party to the conflict.

Poroshenko's press office said in a statement that Moscow and Kiev had agreed on a "permanent ceasefire" in the Donbass region of eastern Ukraine.

Russian news agency RIA quoted Dmitry Peskov, Putin's press secretary, as saying: "Putin and Poroshenko really discussed the steps that would contribute to a ceasefire between the militia and the Ukrainian forces. Russia cannot physically agree to a ceasefire because it is not a party to the conflict."

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There was no immediate sign on the ground of a halt in the fighting between Kiev's forces and pro-Russian separatists in the mainly Russian-speaking region, which is home to much of Ukraine's heavy industry.

In a statement, Poroshenko's press office said: "As a result of the conversation (between the Ukrainian president and Putin) agreement was reached on a permanent ceasefire in the Donbass.

"Mutual understanding was achieved concerning the steps which will enable the establishment of peace," it added.

Earlier, Putin's spokesman was quoted in Moscow by Interfax news agency as saying the Russian leader and Poroshenko had largely agreed in their telephone conversation on what needed to be done to resolve Ukraine's six-month-old crisis.

The spokesman, Dmitry Peskov, gave no details and made no direct reference to a ceasefire.

Initial reaction from Ukrainian forces was cautious.

"At the moment that journalists told me of a ceasefire, we came under fire twice," Serhiy Melnichuk, commander of the Aidar volunteer militia battalion in the Donbass, told Ukraine's 112 TV channel.

"We have received no orders yet. Russia needs to remove its forces from our territory ... We have to stop this slaughter, we are destroying the nation."

Interfax quoted a leading separatist in Donetsk, the biggest city of the Donbass, as saying the pro-Russian rebels were ready to halt their military operations if Kiev also accepted a ceasefire.

"If the Ukrainian side observes its promises on a ceasefire, we are ready for a political resolution of the process," said Miroslav Rudenko, a deputy in the local assembly of the self-proclaimed "Donetsk people's republic".

According to the United Nations, the war has killed more than 2,600 people and driven nearly a million from their homes in eastern Ukraine.