Vladimir Putin formally took Russian military intervention in eastern Ukraine off the table as separatist leaders agreed to a ceasefire, proposed by Kiev, in the region.

But both the government and the rebels accused each other of continuing to open fire after the ceasefire was agreed Monday evening, and the downing of a Ukrainian helicopter on Tuesday evening, killing nine, raised further questions about the possibility of ending the bloodshed quickly.

The fighting has left hundreds dead over the past two months and the region now enters a difficult and uneasy period of negotiations aimed at stopping the cycle of violence.

Putin on Tuesday asked the upper house of the Russian parliament to revoke its ruling in March saying Russia could use troops on Ukrainian territory.

Cancellation of the ruling, passed before the annexation of Crimea, is another sign that the Kremlin is attempting to de-escalate the situation, after weeks during which Kiev feared Russian troops massed close to the border could invade at any minute.

Putin's spokesman told Interfax that the decision to cancel the order was given "in order to normalise and regulate the situation in the eastern regions of Ukraine, and due to the start of the three-way talks on the issue".

Petro Poroshenko, Ukraine's new president, announced a unilateral ceasefire on Friday that he said would last a week and would give separatists a chance to go or lay down their arms and get amnesty as long as they had not committed serious crimes.

Despite promising negotiations few thought Poroshenko would speak to leaders of the self-proclaimed "people's republics" in the east, whom Kiev had branded "terrorists".

But on Monday surprise talks took place in Donetsk, one of the centres of the rebel movement, involving Poroshenko's representative, the former Ukraine president Leonid Kuchma, and separatist leaders. Also in attendance was an OSCE representative, the Russian ambassador to Ukraine, and a pro-Russia Ukrainian politician, Viktor Medvedchuk, who is on the US sanctions list for his role in the annexation of Crimea, but who Putin has said should play a key role in any negotiations.

After the meeting, the self-styled prime minister of the Donetsk people's republic, Alexander Borodai, said the rebels would also agree to the ceasefire. Previously, the insurgents had said there could be no talk of ceasefire until Ukrainian troops were withdrawn from east Ukraine, suggesting that the rebels, or those who control them, had decided to soften their stance. Borodai is a Russian citizen and was in Moscow for consultations in the days preceding the negotiations.

Despite the promises of a ceasefire, distant shelling was still audible Monday night in Slavyansk, the besieged rebel-controlled city that government forces have been shelling almost daily since the end of May. As usual, it was not entirely certain which side had begun the fighting, but government forces have had far more firepower at their disposal.

"[Separatist] fighters are not ceasing to shoot at the positions of Ukrainian forces," Vladislav Seleznev, a spokesman for the Ukrainian forces, said on his Facebook page on Tuesday, while the rebels accused government troops of opening fire.

Later in the day he confirmed that a Ukrainian helicopter had been shot down near Slavyansk, killing nine people on board.

The Guardian saw a huge plume of black smoke rising outside the city near a government forces base at the Karachun television tower late Tuesday afternoon.

Roman, the deputy commander of a frontline rebel base in the suburb of Andreyevka, said government forces had shot mortars and cannon at them at about 10pm on Monday. He pointed to three holes in the road outside the base that appeared to be from fresh shell impacts.

The fighting, he said, had started when government snipers had fired on them from inside a nearby factory. After his forces "cleaned out" the factory, the Ukrainians fired the ordinance, he added.

"They're the ones who need an order to cease fire. We don't attack first. Who would we shoot? We're protecting the people here," Roman said.

Doubts remain whether a ceasefire can be enforced by either side. The rebel forces include a mélange of armed groups loyal to their direct commander, while volunteers from irregular battalions and recently assembled national guard units make up a large part of the pro-Kiev military operation.

But the presence of Alexander Khodakovsky, commander of the battle-hardened Vostok battalion, and Valery Bolotov, leader of the army in Luhansk, at the press conference where Borodai announced support for the ceasefire, suggested a consensus among rebel groups.

Vladimir Inogorodsky, spokesman for the self-declared Luhansk people's republic, said rebel forces there would honour the ceasefire but would return shots if they were attacked.

Nevertheless, Igor Strelkov, a Russian citizen who commands the rebels in Slavyansk, said in a statement on Tuesday that he thought there could be no talk of any ceasefire in the area. "Starting this morning both sides were firing mortars in Semyonovka," he said. Three rebels had been injured, he added.

During a visit to Semyonovka by the Guardian on Sunday, pro-Russian fighters in the village claimed government forces were still attacking without provocation.

A rebel, who goes by the nom de guerre of Murmansk, said Ukrainian forces had continued to fire mortars into the area even after Poroshenko announced the ceasefire late on Friday, but admitted the shelling had been less frequent.

Reached on Tuesday, he claimed that government forces were still attacking rebel positions. Beginning at 7:40am, Ukrainian forces shelled rebel check points in Semyonovka periodically, firing about 50 mortar rounds and 20 tank rounds, he said.

The ceasefire came after an intense round of telephone diplomacy, with Putin speaking by phone to the leaders of Germany, France and the US.

Putin has been warned by western leaders that Russia will face more sanctions if the crisis in east Ukraine escalates, and though thousands of Russian troops in central Russia were put on high alert for drills over the weekend, the prospect of a genuine military intervention in east Ukraine appears to have receded.

Putin arrived in Austria on Tuesday, where the Ukraine issue is again likely to dominate his meetings.