Ukrainian troops recaptured almost all the territory of Donetsk airport in eastern Ukraine they had lost to separatists in recent weeks, even as thousands gathered in Kyiv for a state-sponsored peace march on Sunday.

The offensive brought fighting close to the industrial city of Donetsk itself, centre of a pro-Russian rebellion, while shelling intensified in other parts of the region, known as the Donbass.

With attempts to restart peace talks stalled, pro-Russian rebels have stepped up attacks in the past week and casualties have mounted, including 13 civilians killed in an attack on a passenger bus, which Kyiv blamed on the separatists.

Military spokesman Andriy Lysenko said the army's operation had returned the battle lines near the airport to the previous status quo and, thus not violated the 12-point peace plan agreed with Russia and separatist leaders last September in Minsk.

"We succeeded in almost completely cleansing the territory of the airport, which belongs to the territory of Ukrainian forces as marked by military separation lines," he told a televised briefing

Donetsk airport, reduced to rubble in the fighting since May, is of limited strategic importance in the short term but has great symbolic value. (Mstyslav Chernov/ Associated Press)

Kremlin spokesman Dmitry Peskov said Moscow was concerned by Sunday's "escalation" by Ukrainian forces.

"This state of affairs in no way contributes to the implementation of the Minsk agreements and the future search for a resolution," the Interfax agency quoted him as saying.

Children killed

Elsewhere in the region, the Ukrainian Interior Ministry said two brothers aged seven and 16 had been killed and their 8-year-old sister injured when a shell struck a house in the government-controlled town of Vuhlehirsk, 60 km from Donetsk.

Spokesman Vyacheslav Abroskin said the shelling had come from the direction of Yenakiieve, which is controlled by the rebels.

'We're talking about Kyiv trying to unleash war again.‛ - Rebel leader Alexander Zakharchenko

Ukrainian President Petro Poroshenko addressed a crowd of several thousand gathered in Kyiv for a peace march in memory of those killed on the passenger bus.

"We will not give away one scrap of Ukrainian land. We will get back the Donbass ... and show that a very important aspect of our victory is our unity," he said.

Rebel leader Alexander Zakharchenko blamed the shelling around Donetsk on the Ukrainian army. "We're talking about Kyiv trying to unleash war again," Interfax quoted him as saying.

No peace talks

Late Sunday, Poroshenko rejected a peace plan proposed to him last week by his Russian counterpart Vladimir Putin, Putin's spokesman Dmitry Peskov saidm according to Russian media.

Peskov said the plan, contained in a letter sent by Putin on Thursday evening, proposed a ceasefire by both government forces and separatist militiamen in southeastern Ukraine, as well as the withdrawal of heavy artillery by both sides.

"In recent days, Russia has consistently undertaken efforts as an intermediary in regulating the conflict," Peskov said in comments quoted by the ITAR TASS news agency.

Alexander, 35, looks through a broken window of his flat, hit by Ukrainian Army Artillery, in the centre of Donetsk on Sunday. (Manu Brabo/Associated Press)

A copy of the letter was published by the Russian television channel NTV. In it, Putin proposed "urgent measures for the cessation of mutual shelling, and also the rapid withdrawal by the sides in the conflict of means of destruction with a calibre higher than 100 mm".

Meanwhile, in Donetsk, residents reported heavy shelling.

"It was impossible to sleep - explosions, the walls were shaking. It seemed like they were firing from near the building ... The DNR (rebel) army were firing from our district," 53-year-old advertising executive Alla said by telephone.

Forty-year-old plumber Andrey Tkachenko, who lives in the southern part of Donetsk, said the shelling had become noticeably worse in the past 24 hours.

"By now we can tell from the sound what's flying. We're used to the GRAD missiles, but now something heavier is firing all night and all day," he said.

The World Health Organization says more than 4,800 people have been killed in the conflict.