Ukrainian forces are retreating from a key town where rebels appear to have emerged victorious after claiming that hundreds of government soldiers had surrendered or been captured.

President Petro Poroshenko declared that his forces were carrying out a “planned and organised” departure from the town of Debaltseve, which has been under siege by separatists for weeks and saw fierce battles yesterday despite a ceasefire declared on Sunday.

Speaking from a snowy airfield in Kiev before leaving for the frontlines, Mr Poroshenko praised Ukrainian forces, claiming they fulfilled their duty in defending the town and had shown the world “the true face of the bandits and separatists who are supported by Russia.”

About 80 per cent of Ukrainian forces had been withdrawn from Debaltseve with their weapons and another two columns were expected to leave today.

Vladimir Putin had earlier told Ukrainian soldiers they should give up to 'save their own lives' (EPA)

Vladimir Putin had earlier told Ukraine it should let its soldiers lay down their weapons and flee battles against rebels “to save their own lives”.

Separatists claimed hundreds of soldiers had already surrendered or been captured, although the numbers could not be confirmed.

The Russian President, who has denied persistent allegations that his government is arming the separatists, seemed to back the rebels in the battle for Debaltseve.

“I hope that the responsible figures in the Ukrainian leadership will not hinder soldiers in the Ukrainian army from putting down their weapons,” he said.

“If they aren't capable of taking that decision themselves and giving that order, then (I hope) that they won’t prosecute people who want to save their lives and the lives of others.”

He added that he hoped the rebels would allow the Ukrainians to return to their families, once they had surrendered Debaltseve.

Ukraine crisis: A timeline of the conflict Show all 23 1 /23 Ukraine crisis: A timeline of the conflict Ukraine crisis: A timeline of the conflict 30 November 2013 Public support grows for the “Euromaidan” anti-government protesters in Kiev demonstrating against Yanukovych’s refusal to sign the EU Association Agreement as images of them injured by police crackdown spread. EPA Ukraine crisis: A timeline of the conflict 20 February 2014 Kiev sees its worst day of violence for almost 70 years as at least 88 people are killed in 48 hours, with uniformed snipers shooting at protesters from rooftops. AFP/Getty Images Ukraine crisis: A timeline of the conflict 22 February 2014 Yanukovych flees the country after protest leaders and politicians agree to form a new government and hold elections. The imprisoned former Prime Minister, Yulia Tymoshenko, is freed from prison and protesters take control of Presidential administration buildings, including Mr Yanukovych's residence. Genya Savilov/AFP/Getty Imageses Ukraine crisis: A timeline of the conflict 27 February 2014 Pro-Russian militias seize government buildings in Crimea and the new Ukrainian government vows to prevent the country breaking up as the Crimean Parliament sets a referendum on secession from Ukraine in May. Sean Gallup/Getty Images Ukraine crisis: A timeline of the conflict 16 March 2014 Crimea votes overwhelmingly to secede from Ukraine and join Russia in a ballot condemned by the US and Europe as illegal. Russian troops had moved into the peninsula weeks before after pro-Russian separatists occupied buildings. EPA Ukraine crisis: A timeline of the conflict 6 April 2014 Pro-Russian rebels seize government buildings in the eastern cities of Donetsk, Luhansk and Kharkiv, calling for a referendum on independence and claiming independent republic. Ukraine authorities regain control of Kharkiv buildings on 8 April after launching an “anti-terror operation” but the rest remain out of their control. EPA/PHOTOMIG Ukraine crisis: A timeline of the conflict 7 June 2014 Petro Poroshenko is sworn in as Ukraine's president, calling on separatists to lay down their arms and end the fighting and later orders the creation of humanitarian corridors, since violated, to allow civilians to flee war zones. Getty Images Ukraine crisis: A timeline of the conflict 27 June 2014 The EU signs an association agreement with Ukraine, along with Georgia and Moldova, eight months after protests over the abandonment of the deal sparked the crisis. LOUISA GOULIAMAKI/AFP/Getty Images Ukraine crisis: A timeline of the conflict 17 July 2014 Malaysian Airlines flight MH17 is shot down over eastern Ukraine, killing all 298 people on board. Ukrainian intelligence officials claim it was hit by rebels using a Buk surface-to-air launcher in an apparent accident. Ukraine crisis: A timeline of the conflict 22 August 2014 A Russian aid convoy of more than 100 lorries enters eastern Ukraine and makes drop in rebel-controlled Luhansk without Government permission, sparking allegations of a “direct violation of international law”. Reuters/Alexander Demianchuk Ukraine crisis: A timeline of the conflict 29 August 2014 Nato releases satellite images appearing to show Russian soldiers, artillery and armoured vehicles engaged in military operations in eastern Ukraine. Nato Ukraine crisis: A timeline of the conflict 8 September 2014 Russia warns that it could block flights through its airspace if the EU goes ahead with new sanctions over the ongoing crisis and conflict EPA Ukraine crisis: A timeline of the conflict 17 September 2014 Despite the cease-fire and a law passed by the Ukrainian parliament on Tuesday granting greater autonomy to rebel-held parts of the east, civilian casualties continued to rise, adding to the estimated 3,000 people killed Reuters Ukraine crisis: A timeline of the conflict 20 October 2014 A 'tactical missile' explosion at a factory sends blast wave across rebel-held cityof Donetsk YouTube Ukraine crisis: A timeline of the conflict 16 November 2014 The fragile ceasefire gives way to an increased wave of military activity as artillery fire continues to rock the eastern Ukraine's pro-Russian rebel bastion of Donetsk Getty Ukraine crisis: A timeline of the conflict 26 December 2014 A new round of ceasefire talks, scheduled on neutral ground in the Belariusian capital Minsk, are called off AFP/Getty Ukraine crisis: A timeline of the conflict 12 January 2015 Soldiers in Debaltseve were forced to prepare heavy defences around the city; despite a brief respite to the fighting in eastern Ukraine, hostilities in Donetsk resumed at a level not seen since September 2014 AFP/Getty Ukraine crisis: A timeline of the conflict 21 January 2015 13 people are killed during shelling of bus in the rebel-held city of Donetsk Reuters Ukraine crisis: A timeline of the conflict 24 January 2015 Ten people were killed after pro-Russian separatists bombarded the east Ukrainian port city of Mariupol AP Ukraine crisis: A timeline of the conflict 2 February 2015 There was a dangerous shift in tempo as rebels bolstered troop numbers against government forces AFP/Getty Ukraine crisis: A timeline of the conflict 11 February 2015 European leaders meet in Minsk and agree on a ceasefire in eastern Ukraine beginning on February 14. From left to right: Belarus President Alexander Lukashenko, Russian President Vladimir Putin, German Chancellor Angela Merkel, France's President Francois Hollande and Ukrainian President Petro Poroshenko. MAXIM MALINOVSKY | AFP | Getty Images Ukraine crisis: A timeline of the conflict 13 February 2015 Pro-Russian rebels in the city of Gorlivka, in the Donetsk region, fire missiles at Ukrainian forces in Debaltseve. Fighting continued in Debaltseve for a number of days after the Minsk ceasefire began. ANDREY BORODULIN | AFP | Getty Images Ukraine crisis: A timeline of the conflict 18 February 2015 Ukrainian soldiers repair the bullet-shattered windshield of their truck as their withdraw from the strategic town of Debaltseve. Following intense shelling from pro-Russian rebels, Ukrainian forces began to leave the town in the early hours of February 18. Brendan Hoffman | Getty Images

Thousands of Ukrainian troops were surrounded yesterday in the strategic railway hub as rebels seized parts of the town.

Gun battles were fought from street to street as mortar fire and rockets rained down on both sides, causing a huge explosion when a gas pipeline was hit.

A gas pipe explosion caused by shelling near Debaltseve (Reuters)

Reuters journalists near the snowy frontline said artillery rounds were rocking Debaltseve every five seconds yesterday and black smoke was rising skywards as Grad rockets pounded the town.

It was unclear how many civilians are still in the besieged town but the UN expressed its concerns for “a few thousand” people believed to be hiding in cellars, trapped.

Rebels claim the ceasefire announced last week does not apply to Debaltseve, which lies between their two main strongholds of Donetsk and Luhansk, as they have already taken “80 per cent” of it and call it “internal territory” – a claim Ukraine denies.

Children sit next to the humanitarian aid in the local Palace of Culture which is used as a bomb shelter in Mironovka village, near Debaltseve, on 17 February 2015. (EPA)

Eduard Basurin, a rebel leader, said negotiations were under way for 5,000 Ukrainian troops to surrender.

“Hundreds” of government soldiers had been captured and would eventually be released to their families, he claimed. Ukraine admitted its troops had been taken but denied the number was so great.

Despite Mr Putin's public call for surrender, Russia sponsored a resolution adopted by the UN Security Council that called on all sides to implement the peace plan, expressing ”grave concern“ at the violence.

Fighters with separatist self-proclaimed Donetsk People's Republic army ride through the ruined village of Nikishine, south east of Debaltseve, on 17 February (Reuters)

Even while supporting the resolution on Tuesday, the US and other council members spoke with scorn.

American Ambassador Samantha Power called Russia's drafting of the resolution "ironic, to say the least" given it was ”backing an all-out assault“ in Ukraine.

The Russian Ambassador, Vitaly Churkin, responded by calling the comments “offensive.”

Hopes that the deal reached last Thursday would end a conflict that has killed more than 5,600 people so far were always slim after a rebel advance in January left a previous ceasefire in tatters.

Buildings damaged by fighting are pictured in the village of Nikishine, south east of Debaltseve, on February 17, 2015. (Reuters)

But EU foreign policy chief Francesca Mogherini refused to concede defeat, acknowledging the battles were “not encouraging” but adding: “As long as there is a signed deal to which the parties still refer as something that needs to be implemented, I will not say that there is a failure.

The Ukrainian government and Nato say the rebel assault on Debaltseve is being reinforced by Russian tanks, artillery and soldiers, while Moscow denies any involvement in the battle for the region termed Novorossiya (New Russia) by Mr Putin and separatists.

American officials said they were "gravely concerned" by the fighting and were monitoring reports of a new influx of Russian military equipment heading to the area.

The US has been considering sending weapons to back Kiev, although the State Department said on Tuesday that getting into a proxy war with Russia was not in the interests of Ukraine or the world.

Mr Putin said he already believed weapons were being sent to the government army.