Ukraine urges mass evacuation as troops surround eastern cities

Ukraine told residents of separatist strongholds in its easternmost regions to flee as government troops close in after dismissing a cease-fire offered by the militants.

Inhabitants of Donetsk and Luhansk, cities that were home to 1.5 million people before the pro-Russian insurgency began in March, can leave via humanitarian corridors, according to military spokesman Andriy Lysenko. The army, which has lost 568 servicemen since the fighting broke out, is targeting a decisive victory after a string of successes in recent weeks.

"We're asking civilians to leave the cities where possible," Lysenko told reporters today in the capital, Kiev. "The operation to encircle these cities is almost over. The active operation continues day and night. We're pushing ahead and aren't stopping."

Ukraine is trying to dislodge thousands of separatists from two regions that border Russia, which denies accusations by the U.S and Europe that it's stoking the deadly unrest. President Vladimir Putin wants its neighbor to halt the military campaign and is offering assistance to tackle what it describes as a worsening humanitarian disaster. Ukraine is threatening Russia with sanctions that may curb energy transit to Europe.

Ukraine's hryvnia strengthened for the first time in four sessions, rising 0.5 percent to 12.49 per dollar, while the yield on the government's dollar-denominated debt due 2023 fell 11 basis points to 9.571 percent, snapping a six-day losing streak, data compiled by Bloomberg showed.

Truce Rejected

A rebel leader broached the possibility of a truce during the weekend, saying in a statement that militants will continue fighting if the government doesn't end its offensive. Lysenko said earlier that the insurgents must back such statements up with actions to lay down their weapons.

The fighting is causing havoc in the built-up areas where it's now concentrated. Luhansk, where about half of the 500,000 population remains, is completely isolated, with electricity cut off in the center and people without phone connections, food, medication or fuel, the city council said today on its website.