The assassination of a Kremlin-backed separatist leader in East Ukraine has jeopardised Western-brokered peace agreements and risked fuelling tensions in the war-torn region, Russia has warned.

Alexander Zakharchenko, 42, was murdered in a bombing at a cafe in Donetsk on Friday in an attack that killed his bodyguard and injured 12 more, including his finance minister.

The Kremlin and Mr Zakharchenko’s fellow rebels have blamed Kiev for the bombing but Ukraine insists the attack was the result of internal fighting and Russian meddling in the breakaway region. Ukrainian media reported the bomb was in a nearby car.

Russian officials led by President Vladimir Putin's spokesman said the former mine electrician's murder would further derail the Ukraine peace deal brokered by Germany and France in the Belarussian capital Minsk in 2015.

The leader of the self-proclaimed Donetsk People’s Republic was a signatory of the agreement and is the highest profile victim from the Moscow backed side in the four year conflict.

More than 10,000 people have been killed since the rebel insurgency broke out in the eastern Donetsk and Lugansk regions in April 2014 following Russia's annexation of Crimea from Ukraine.

Vladmir Putin, the president of Russia, praised Mr Zakharchenko, whose death sparked an outpouring of public grief among his supporters, and branding the killing a “dastardly act”.