Ukrainian troops and pro-Russian rebels have been exchanging heavy artillery fire in and around Debaltseve, a strategic town in eastern Ukraine.
The rebels say they have fully seized the nearby town of Vuhlehirsk, but the Ukrainian military denies this.
Many civilians remain trapped in Debaltseve, while others - including people with shrapnel wounds - have managed to reach the town of Artemivsk.
Seven people were reportedly killed by shellfire in the rebel-held Donetsk.
Shells hit a bus and a cultural centre in the city, where civilians were receiving humanitarian aid, rebel sources say.
A Reuters cameraman saw six bodies at the scene after the artillery strike in the city's Kyibishevskiy district.
The rebels blamed Ukrainian forces for the shelling, but Ukrainian military spokesman Volodymyr Poliovyi was quoted by the Ukrainska Pravda website as saying government troops had not carried out any "active" operations in Donetsk.
The recent heavy fighting has left a ceasefire agreed in September in tatters.
The OSCE security organisation has been trying to restart ceasefire talks in Minsk.
Reports suggested the talks could start as early as Friday, but no meeting was held in the Belarusian capital.
Russia's representative to the OSCE, Andrei Kelin, accused Ukraine of pursuing a military solution.
"We do not see the slightest signs of Kiev's willingness to stop the hostilities, to engage in dialogue with the opposing part of the population in eastern Ukraine, or to begin the process of political settlement," he told the OSCE on Thursday.
Russia's Vesti TV news programme says some 8,000 Ukrainian troops are surrounded in Debaltseve. It also quotes the rebels as saying they have pushed Ukrainian troops out of Vuhlehirsk, though rebel positions in the village are still being shelled.
Meanwhile, a Ukrainian MP in the conflict zone, Semen Semenchenko, says the rebels now control part of Vuhlehirsk, but that Ukrainian troops are still holding out there amid heavy shelling.
The rebels are also firing Grad rockets and mortars at Ukrainian forces in Debaltseve, he says in a Facebook post.
Sanctions on Russia
On Thursday EU foreign ministers agreed to extend existing sanctions against Russia until September.
At an extraordinary meeting in Brussels, they also agreed to discuss names to add to the list of individuals targeted for EU travel bans and asset freezes.
However, they did not agree on imposing new economic sanctions against Russia.
Thursday's EU meeting was called after the government-held port of Mariupol in Ukraine was shelled at the weekend, with the deaths of at least 30 people. Ukraine blamed the rebels for the attack.
Nato says hundreds of Russian tanks and armoured vehicles are in eastern Ukraine.
Moscow denies direct involvement but says some Russian volunteers are fighting alongside the rebels.
More than 5,000 people have been killed and some 1.2 million have fled since the rebels seized a big swathe of Luhansk and Donetsk regions last April, following Russia's annexation of Crimea.