Ukraine president vows vengeance
Ukraine's president has vowed vengeance in blood after 19 troops were killed in an insurgent rocket attack.
Meanwhile residents of the rebel-held city of Donetsk began fleeing in large numbers for fear of a government siege.
The barrage of rocket fire just before sunrise at a base near the Russian border was a devastating setback for government forces, who had seemingly gained the upper hand last weekend when they pushed the pro-Russian fighters out of their stronghold city of Slovyansk.
In addition to those killed, 93 soldiers were wounded, the defence ministry said.
"For every life of our soldiers, the militants will pay with tens and hundreds of their own," Ukrainian president Petro Poroshenko warned. "Not one terrorist will evade responsibility. Everybody will get what is coming to them."
Ukrainian government troops have been fighting for more than three months against separatists in eastern Ukraine, and in the last two weeks, they have cut the territory held by the rebels in half. Driven from Slovyansk, the rebels have regrouped in Donetsk, an industrial city of one million, and Ukraine has said it will cordon off the area.
In anticipation of a siege, leaders of the self-styled Donetsk People's Republic announced they will evacuate entire neighbourhoods. Many residents have rushed to pack up and leave for fear of getting caught in the cross-fire, given the insurgents' strategy of using residential areas for cover.
"The militia has begun blowing up roads, so I want to get out while there is still time. I don't want to turn into a living shield for the militants," said 56-year old businessman Andrei Koziyatko.
High-end shops are boarded up, and many other businesses, including insurance companies, real estate offices, beauty salons and notaries, have closed their doors. "For sale" and "For rent" signs abound where there were none a few weeks earlier. Property values have collapsed, with one-bedroom apartments in the city center now selling for one-third of what they cost before.
Estimates of how many people have left vary. The mayor's office said 30,000. Donetsk People's Republic prime minister Alexander Boroday put the number at 70,000 and rising.
At the Donetsk train station, people waited in long lines at the ticket office. Four trains a day go to the capital, Kiev, and three others travel in the opposite direction, to the southern Russian city of Rostov-on-Don.
"People are trying to go in any which direction. But all the tickets for the coming week are sold out," station director Irina Nikolaicheva said.
Irina Khodyko, a 38-year old accountant, said she was leaving for Kiev with her 10-year old son and 12-year old daughter. Their apartment is by the once-gleaming international airport - now a bombed-out ruin in a district rendered inaccessible by the daily clashes.
"Life has become impossible. Every day they shoot. All the windows in our apartment are shot out. The children have stopped sleeping," Khodyko said.
She said insurgent forces tried to press-gang her husband into fighting, but he fled.
"The Ukrainian army is in no rush to liberate us. They have just abandoned us, and we are forced to get ourselves out of this mess," she said.
Koziyatko, the businessman, has been forced to close his lumber and building equipment supply business, which employed 17 people, after more than half his workers left Donetsk.
"The smartest, best-educated and most talented people are fleeing. And who is going to stay?" he asked.