SLAVIANSK Ukraine (Reuters) - Dozens of charred bicycles stand upright in the rubble of a burnt-out sports shop in Slaviansk, a strategic stronghold for pro-Russian separatist rebels in eastern Ukraine.

A woman stands near charred debris in a bicycle store after what locals say was overnight shelling by Ukrainian forces, in the eastern Ukrainian town of Slaviansk June 9, 2014. REUTERS/Gleb Garanich

After a week of intensified shelling by government forces, windows of buildings on the outskirts of the city have been blown out, fires have gutted stores and the hulks of damaged Soviet-era cars lie abandoned in the road.

A few stores are still operating in the leafy town center, where the muffled sound of mortar fire drifts in from areas around the city edges, but life has been transformed even there.

A few days ago, residents were showing defiance by carrying on their lives as best they could. Now only a handful of people dare to walk in the open near the city hall, barricaded by sandbags and fenced off by the rebels. Others have fled.

“Why do my children and I have to know every day what time the shelling will start?” asked Nina Moiseyeva, tears rolling down her face as she walked with two bags of groceries. “We know when to expect it every morning: eight or nine o’clock.”

Although the army denies shelling civilians or buildings used by civilians, a woman who gave her name only as Tatyana said she had seen the incident in which the now burnt-out sports store was hit: “People were burned, lying on the street. There was a body lying there,” she said pointing under the rubble, her hands dirty because of a lack of water to wash with.

The transformation of Slaviansk in the past week is a result of the two-pronged policy being pursued by President Petro Poroshenko, the pro-Western leader elected last month and sworn in on Saturday with a pledge to end the insurrection.

Although he has started talks with Russia on a peace plan he has drawn up, he has also ordered Ukraine’s armed forces to step up their “Anti-Terrorist Operation” to win back control of towns and cities held by rebels seeking unification with Russia.

He is treading a tightrope. The rebels show no sign of surrendering, meaning force looks the only way of prising them out; but pushing too hard risks civilian casualties. That could both antagonize Moscow, whose troops are just across the border, and alienate eastern Ukrainians, deepening the nation’s divide.

STRATEGIC LOCATION

The military operation has focused increasingly on Slaviansk, a city of 130,000 which has been controlled since April by masked, camouflage-clad militants wielding assault rifles and grenade-launchers who oppose central rule by Kiev.

It has strategic value because it sits at the center of the Donbass coal mining region, at the crossroads of the three main regions of eastern Ukraine.

The Kiev government, battling to restore its authority after Russia annexed the Crimea peninsula following the overthrow of Poroshenko’s predecessor, said over 300 rebels were killed in one 24-hour period last week although the separatists deny this.

The violence is increasingly taking its toll on civilians as well. Residents estimate a third of the population of Slaviansk has fled hardships such as cuts in electricity and water supply.

Journalists enter and leave through an army checkpoint, at which there is a steady trickle of cars ferrying out residents, mainly women and children with their belongings and food.

On the day of Poroshenko’s inauguration on Saturday, organizers of a relief operation say more than 100 women and children left the city in minibuses to take refuge in Soviet-era recreational camps in a region farther to the west.

Men were barred from leaving, turned back at a checkpoint by the Ukrainian army, fearing they could join rebel forces elsewhere. “We all tried to leave together last week, but the Ukrainian military wouldn’t let me pass. They said I might be a terrorist,” said a 34-year-old market trader who gave his name only as Alexei and had hoped to leave with his two daughters.

The organizers of the evacuation convoy said they had reached an agreement with Kiev forces not to shell Slaviansk until they had left the city. As soon as the minibuses pulled away explosions in the distance began again.

The New York-based rights watchdog Human Rights Watch has urged the Ukrainian government to review its operation in Slaviansk and the neighboring village of Semyonevka, saying it has an obligation not to attack civilians or civilian objects.

Vladislav Seleznyov, a spokesman for the military operation in eastern Ukraine, has accused the rebels of shelling civilian positions.