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Deadly Ukraine clashes cast further doubt on peace talks

A burst of violence in eastern Ukraine cast further doubt Friday over whether a planned summit can bring lasting peace, with at least 11 people killed in clashes between the army and pro-Russian rebels.

Kiev: A burst of violence in eastern Ukraine cast further doubt Friday over whether a planned summit can bring lasting peace, with at least 11 people killed in clashes between the army and pro-Russian rebels.

The latest fighting came as Ukraine`s central bank chief issued a fresh warning that the country will need assistance from foreign donors to find its way out of a "full-blown financial crisis" while it also seeks to fund the war.

After weeks of relative calm, the new wave of violence has shaken eastern Ukraine, threatening all-out conflict and serving as a reminder of the war`s worst days last summer.

Heavy artillery and shelling has rocked the area around the Donetsk airport, a wrecked shell repeatedly hit by battles but still of symbolic and strategic importance. After an overnight lull, there were further intense clashes on Friday.

Rebels had claimed on Thursday that they were on the verge of capturing the airport, but Ukrainian President Petro Poroshenko refuted their claims on Friday.

One of his advisers spoke of intense fighting, calling it "the worst since late September," while military spokesman Andriy Lysenko said there had been a build up of rebel armoured vehicles along the front line in the Donetsk region.

"In the city of Gorlivka, a three-kilometre-long column of tanks heading toward Ukrainian positions was discovered," he said.

At least six Ukrainian soldiers were killed and 18 others wounded, while five civilians were left dead on Thursday and Friday, officials said.

Fighting around the airport on Thursday forced monitors from the Organisation for Security and Co-operation in Europe to turn back when attempting to approach it.

The OSCE mission warned of civilian casualties since attacks were being launched from within or around residential areas, drawing counter-fire.

It also said the mission had on Thursday met with civilians in rebel-controlled Pervomaisk west of Lugansk "who have been living in a basement for nearly six months due to continuous shelling."

"They do not have running water. Residents told the (mission) that during eight hours of shelling the previous day, there were about 100 people in the improvised shelter."

It said children "are largely confined to the basement, with limited access to fresh air and daylight."The International Monetary Fund has already approved a $17 billion loan package for Ukraine, but has said that the country may still require nearly the same amount again to fill a funding gap this year.

"We can state that we are suffering a full-blown financial crisis that could be overcome only by decisive action: significant budgetary savings and financial support from international donors," central bank chief Valeria Gontareva told parliament on Friday.

Some analysts have argued that Russia`s strategy in the conflict may be to exhaust Ukraine`s defence and financial resources, preventing it from further integration with the West.

Russia however denies sending troops and weapons into eastern Ukraine to support the rebels, despite witness claims to the contrary, and peace talks have meanwhile stalled.

A round of contact group talks initially scheduled for later Friday in Minsk between representatives of the OSCE, Ukraine and Russia, along with rebel leaders, appeared to have been put off. They have not met since December 24.

At the same time, a summit Poroshenko has been seeking with the leaders of Germany, France and Russia intended for this week has been postponed.

Poroshenko is now hoping it can be held at the end of the month, but German Chancellor Angela Merkel has said there would be no point if the fighting continues.

Merkel and Poroshenko spoke by phone on Friday, discussing the need to calm the situation, the Ukraine presidency said.