SHCHASTYA, Ukraine -- The welcome sign at the entrance of Shchastya, a small town in eastern Ukraine, now reads like a cruel joke.

"Happiness Begins Here," says the stone marker, a decrepit blue-and-yellow affair pockmarked by bullets.

The inscription is intended as a pun, Shchastya meaning "happiness" in Ukrainian. But there is little joy to be found here these days.

The town has been a hotspot of fighting between Ukrainian forces and pro-Russian separatist rebels, who captured it for several weeks last summer. It is currently controlled by Ukrainian forces.

It has seen heavy casualties on both sides. Last week, four Ukrainian soldiers were killed nearby after their vehicle struck a land mine. Civilians, too, have died.

Shells Are Not Signed

In February, a tentative peace returned to Shchastya thanks to a Western-brokered cease-fire reached in Minsk. Shell-shocked residents, however, are still reeling from the violence.

"In September, a sniper's bullet flew in during class," recalls Antonina Shchegolkova, the director of Shchastya's primary school No. 1. "The bullet flew across the entire class and hit the blackboard close to the teacher. We were lucky."

The school was shelled three times. Four shells landed in the yard and shattered the windows. Another strike damaged the main building. In February, a mine exploded under the school porch, leaving a huge crater. Again, no one was hurt.

But Shchegolkova says the fighting has traumatized the children. It has also caused emotional rifts between the ones whose parents support the separatists and the others whose family has stayed loyal to Ukraine. "I tell them that their task is to study and stay alive, let the adults sort this out themselves," she says.

Shchegolkova herself is openly pro-Ukrainian, which doesn't prevent her from criticizing the new leadership in Kyiv. She believes Ukrainian forces could be to blame for some of the local civilian casualties. She still doesn't know which side, rebels or soldiers, fired the shell that killed her own father in August 2014.

"I didn't want to let him go [outside], but you know how stubborn elderly people can be," she says. "A shell fell on a bus stop, five people died. Shells are not signed, it may have been one of ours."

Merry Hill

Most of the insurgent strikes were launched from Merry Hill, an elevated spot on the edge of Shchastya. Behind the hill lies Luhansk, the second-largest city controlled by the insurgents.

Almost 14,000 people lived in Shchastya before the conflict. Only about 3,000 remain, many of them pensioners.

While the fighting has stopped, destruction is everywhere. The shelling has smashed countless windows and left gaping holes on buildings across the town.

"A shell fell here and a woman was killed by a falling beam," explain Andriy, a medic helping out the Ukrainian fighters, pointing to an apartment block. "The beam lay there for some time, spattered with blood."

The hospital, too, has come under fire. A charred ambulance parked outside testifies to the violence that shook this once uneventful city. One of the hospital's floors has been turned into a sickbay for injured soldiers.

Surgeons and other specialists, however, have long fled. Shchastya's last anesthesiologist left last summer after her husband, who had joined the separatists, was killed in a firefight.

On the city's central square, young mothers strolling with their children lend the area an atmosphere of normalcy. Only the empty pedestal, on top of which the statue of Bolshevik leader Vladimir Lenin once stood before being toppled by Ukrainian fighters, evokes the conflict. Local residents have jokingly dubbed it "the monument to the invisible man."

Close to the square is the police academy, now the headquarters of the Aidar Battalion. Like similar battalions across eastern Ukraine, it is composed of volunteer fighters and is formally part of the Ukrainian armed forces.

Aid workers are unloading boxes of medical supplies from a minivan parked at the gates. "Please, give me some painkillers, I have joint pains and no money for medicine," pleads an elderly woman on crutches. "I have no drugs for you," grumbles the guard. "Everyone asks for some, although their relatives are fighting for the separatists."

A volunteer finally hands her a pack of painkillers. The guard turns around, pretending not to see. The woman's hands are shaking.

Relations between local residents and Ukrainian soldiers are often tense. Many Shchastya residents are ethnic Russians and back the separatists. "You give a granny 10 hryvnyas for bread and she swears at you as soon as you turn your back," complains an Aidar fighter.

Peaceful Skies

In a town with such a cheerful name, it's only logical that the city hall stand on Peace Square. Deputy Mayor Volodymyr Tyurin himself is a debonair man with a round face and playful eyes.

"I'm collecting applications for material assistance from people whose homes were damaged in the shelling," he explains, pointing at the thick pile of documents on his desk.

Tyurin holds little hope of obtaining funds to repair his town. Right now, Ukraine's cash-strapped government is mostly focused on stamping out the insurgency and averting economic collapse.

With the town changing hands and residents shifting allegiance, Tyurin's job has been a tricky balancing act. He says the Ukrainian soldiers who recaptured Shchastya first treated local residents with wariness. But when state funding from Kyiv dried out, it was the army that helped feed people and collected the garbage.

"There've been all kinds of situations," Tyurin says, pensively wiping his glasses.

Tyurin himself was briefly locked up after accusing Ukrainian fighters of looting. "They detained me for 20 days so I wouldn't cause a fuss," he says. "Then the commander of the Aidar Battalion came and apologized."

Tyurin decided to let the incident pass. "There were other people who complained and they were beaten, their ribs were broken," he says.

He estimates that Shchastya's population is split roughly in half between separatist backers and Ukraine stalwarts. He still cannot understand how this small community, which led a peaceful existence up until last year, has become torn by such hateful divisions.

He says one Shchastya resident was among the separatist militants who shelled his hometown on the eve of the cease-fire. After firing a mortar, the man phoned his former neighbor in Shchastya and asked him, "So, did you receive my greeting?"

"During holidays we used to raise toasts to peaceful skies above our heads," Tyurin recalls sadly. "It turns out we had no clue what this toast meant."

Read this story in Russian here