Intense artillery fire thundered around the Kiev-controlled town of Debaltseve, a key position between the rebel bastions of Donetsk and Lugansk, where insurgent fighters are trying to encircle Ukrainian troops.
Officials said civilians are being evacuated along the only passable road linking the town to the government side and that conditions are increasingly dire for those left behind.
"People are fleeing because the shelling is non-stop. There's no water, electricity or heating in the town," a local police commander Yevgen Lukhaniv told AFP.
As fighting focused there, the number of casualties from clashes around the war-torn region continued to stack up.
Ukraine's military said 13 soldiers had died and 20 were wounded over the past 24 hours, pushing the military death toll over the past two days to 28.
At least 17 civilians also died in fighting across the war-torn east, government officials and separatist rebels said.
The latest bloodshed came as Ukraine's warring sides looked further than ever from agreeing a peace deal after the collapse of truce talks yesterday.
The three leaders again called for "an immediate ceasefire", according to the French presidency.
The fighting in eastern Ukraine has now left at least 5,100 people dead since April.
Mediators and Ukrainian representatives accused the separatists of scuppering yesterday's truce talks despite growing international pressure to end a surge in violence in recent days.
The Organization for Security and Cooperation in Europe (OSCE), which is involved in the talks along with Russia, said that rebel negotiators in Minsk "were not even prepared to discuss implementation of a ceasefire and withdrawal of heavy weapons".