Ukrainian warplanes bombarded separatist positions along a broad front Saturday, inflicting huge losses, Kiev said, in line with President Petro Poroshenko vow that "scores and hundreds" would be made to pay for a deadly missile attack on government forces.

In exchanges marking a sharp escalation in the three-month conflict, jets struck at the "epicenter" of the battle against the rebels close to the border with Russia, a military spokesman said.

The planes targeted bases from where separatists — using high-powered Grad missiles — bombarded an army-motorized brigade in Zelenopillya on Friday, killing 23 servicemen.

Meanwhile, artillery fire killed at least four people in an overnight attack on Maryinka, a residential area in Donetsk, spurring more people to flee the besieged city and its suburbs on Saturday. The overnight artillery strike hit four apartment blocks near a rebel base. It was unclear, however, which side fired at the buildings.

Pro-Russian insurgents last week retreated from the strategic city of Slovyansk and holed up in Donetsk, a city of one million, and potentially the final frontier for the rebels.

Warplanes also struck at targets near Donetsk on Saturday, destroying a powerful fighter base near Dzerzhinsk, Andriy Lysenko, a spokesman for the "anti-terrorist operation" said.

"According to preliminary assessment, Ukrainian pilots ... killed about 500 (rebel) fighters and damaged two armored transporters," Lysenko told journalists.

Rebel representatives, quoted by Russian news agencies, denied they had suffered big losses and said the Ukrainians were using outdated intelligence about where separatist forces were deployed.

At least two more Ukrainian soldiers were killed and about 20 injured on Saturday by a mortar bomb and missile bombardment at army checkpoints in Dyakove and Nyzhnoderevechka near Luhansk, government officials said.

The increasing violence will bring a new sense of urgency to diplomatic attempts to end the worst crisis between Russia and the West since the Cold War.

After a pro-Western revolt in Kiev ousted a Moscow-backed president in February, Russia annexed Ukraine's Crimean peninsula and pro-Russian separatists seized strategic buildings in towns in the Russian-speaking east, setting up "people's republics" and declaring they wanted to join Russia.

More than 200 Ukrainian servicemen have been killed since then, and hundreds of civilians and rebels have also died.

The United States and the European Union have brought in limited sanctions against Russian businesses amid Ukrainian allegations that Moscow has fanned the conflict and turned a blind eye to military equipment and Russian fighters crossing the border.

On Saturday, the EU targeted 11 Ukrainian separatist leaders with travel bans and asset freezes, avoiding fresh sanctions on Russian business to avoid antagonizing its main energy supplier.

The rebels' missile strike on Friday was against a part of a contingent of troops sent to the area specifically to try to block military equipment and guns being brought in from Russia to help the rebels.

"The situation on the border is very difficult because there is a strip of border there which has been turned into the epicenter of confrontation," Lysenko said.

"This is because this is a part of the border through which the Russian terrorists are trying to bring in military equipment and arms.

Friday's military setback at Zelenopillya took the gloss off the government's recapture of the rebel stronghold of Slaviansk last weekend.

The Ukrainian military, following the Slaviansk victory, says it has readied a plan to oust the rebels now from Donetsk.

Poroshenko has said the military plan will be aimed at protecting civilians there and had appeared to rule out the use of airstrikes and artillery to crush the rebels.

Poroshenko, who was also urged by German Chancellor Angela Merkel to use a sense of proportion in actions against the separatists, had further talks on Friday with Donetsk mayor Aleksander Lukyanchenko on the issue.

Western allies and Russia are pressing for a new meeting of the 'contact group' involving separatist leaders to try to negotiate an end to the crisis.

Poroshenko says he has proposed various venues for these talks to take place but has said there will be no repeat of a 10-day unilateral ceasefire by government forces that lapsed on June 30.

The Ukrainian government says that ceasefire was repeatedly violated by the rebels and that more than 20 Ukrainian servicemen were killed while it was in force.

Wire services