Reports of overnight artillery fire by Russia-backed rebels on key eastern port of Mariupol as truce set to take effect from midday

Hours before an expected ceasefire in eastern Ukraine, heralded as a significant breakthrough by Nato leaders meeting in Newport, heavy shelling has been heard on the outskirts of Mariupol.

A commander of a Ukrainian volunteer militia based in the key eastern port city told Reuters: "We were under fire all night but we are still keeping the rebels at bay. They are facing us with tanks and artillery."

The mayor of Mariupol, Yuri Khotlubey, told Ukraine's 112 TV channel: "Our artillery has come and is being deployed against the [pro-Russia] rebels."

A series of explosions was also heard in the main eastern rebel hub of Donetsk overnight, apparently coming from the city's airport, according to reports.

Mariupol has become the latest flashpoint in the east of the country as separatists wage a counter-offensive that has seen swaths of land seized from government forces in just a matter of days.

Residents of the government-held city on the Sea of Azov have been digging in for fear of a major onslaught by the rebels, apparently backed by Russian troops and firepower.

By mid-morning, the shelling had died down. Andriy Biletskiy, commander of the far-right Azov battalion which has been doing much of the fighting, said the pro-Russia forces had been pushed back to 20km from the town, having reached 5km on Thursday.

Tanks and other armour from the Ukrainian army arrived late on Thursday evening, he said, and despite coming under heavy artillery fire, the Ukrainians were able to repel the rebel advance.

It was unclear whether the rebel moves had been aimed at a serious assault on the city or were instead an extra bout of pressure to push the Ukrainians to sign a ceasefire deal in Minsk.

Biletskiy said he would obey the ceasefire order if it came but he hoped it would only be temporary: "What talk can there be of a ceasefire when the enemy is on our land?"

The ceasefire, part of a seven-point peace plan proposed on Wednesday by the Russian president, Vladimir Putin, and welcomed by Nato leaders, would freeze forces in their positions at around midday on Friday.

The Ukrainian president, Petro Poroshenko, who expressed cautious optimism about the truce, caught Nato officials off-guard, however, with the disclosure that, while Nato was not arming Ukraine, at least one country, which he did not name, was providing Kiev with high-precision weapons.

In Ukraine on Thursday, a column of rebel armour was spotted moving in the direction of Mariupol, and there were reports of Ukrainian forces shelling the outskirts of Donetsk.

In spite of the proposed truce, the US and the UK remained sceptical about Putin's intentions and urged more diplomatic and economic pressure, including the threat of increased sanctions. As part of that, the EU is expected to go ahead on Friday with new sanctions against Russia.

Poroshenko made the ceasefire announcement at the Nato summit in Newport where he met the British prime minister, David Cameron, US president, Barack Obama, German chancellor, Angela Merkel, French president, François Hollande, and Italian prime minister, Matteo Renzi.

At a press conference with the Nato secretary general, Anders Fogh Rasmussen, Poroshenko said he hoped the ceasefire would happen, but he remained suspicious because Putin had proposed it.

Rasmussen said he had seen similar moves before by Russia that had been smokescreens, but he would welcome a serious political settlement.

Poroshenko said that, provided a peace meeting in Minsk between Russia, Ukraine and the Organisation for Security and Cooperation in Europe (OSCE) goes ahead as planned on Friday, he would call a halt to Ukrainian military attempts to regain territory held by the separatists. "I will call on the general staff to set up a bilateral ceasefire."

Alexander Zakharchenko, the separatist leader, said he would order a ceasefire an hour later. The rebels are proposing the creation of "security zones" that would be policed by representatives of the OSCE and the establishment of a corridor for refugees.

Reaching a lasting peace agreement will be difficult. Ukrainian authorities are unlikely to accept any settlement that involves recognising rebel control over parts of Ukrainian territory, but are aware that Kiev's forces have suffered such losses in the past fortnight that they cannot go on fighting.

The White House expressed support for Poroshenko's "efforts to achieve a peaceful resolution to the conflict", and pinned the blame for the conflict on Putin, condemning Russia's "flagrant violation of Ukraine's sovereignty".

Nato has ruled out intervening in Ukraine with troops or equipment and pressure from the west has come mainly through sanctions.

Although Poroshenko did not name the country providing Ukraine with weapons, only a small number, such as the US, Poland or even Britain, have both the necessary equipment and the sympathy for the Ukrainian cause.

Such weapons are desperately needed by Ukraine because it is confronting an estimated 100 tanks and it does not have the kind of anti-tank weapons that can be fired at distance.

The number of Russian troops were said by Ukraine to be in the thousands rather than just 1,000, suggesting an escalation rather than de-escalation.

At the end of its two-day summit, Nato is to issue a strongly worded document condemning Russian actions in Ukraine, declaring Moscow to be in breach of international agreements. There have been disagreements over the wording, with the US, Britain and Poland seeking tough language and Germany seeking to water it down.

European Union ambassadors meeting in Brussels agreed that restrictions imposed on Russian state-owned banks would be extended to state-owned defence and energy firms. The US and Britain pushed for the sanctions to go ahead in spite of the ceasefire but other countries were more hesitant.

The sanctions come after France, under pressure for going ahead with the export of Mistral helicopter carriers to Russia, finally caved in and said it would delay the contract because of events in Ukraine. Hollande said delivery of the first ship, which had been scheduled for October, was dependent on the ceasefire holding and a political settlement being reached.