However, separatist officials blamed Ukraine, claiming government forces had shelled the city.
"Some 15 people have been killed," Vladimir Kononov, defence minister for the self-declared Donetsk People's Republic, told the local DAN news agency. About 60 civilians had been injured, some seriously, DAN reported, citing a separatist doctor.
The artillery and gunfire clashes knocked out power in the region, trapping hundreds of coalminers temporarily underground, separatist officials added.
Dmitry Peskov, a Kremlin spokesman, said Russia was "deeply concerned with the provocative actions by the Ukrainian armed forces that are, as far as we can see, provoking the situation".
Marie Harf, a state department spokeswoman, said that the attack had been launched by "combined Russian separatist forces" against Ukrainian government positions.
"Russia bears direct responsibility for preventing these attacks and implementing a ceasefire. Any attempts to seize additional Ukrainian territory will
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In a rare public appearance in Moscow, Igor Girkin, the rebels' former military commander, said the region was witnessing a level of fighting not seen since the start of the year — saying there had also been a surge in fighting around the towns of Horlivka and Debaltseve.
The scale of the violence spooked investors, with the Russian stock market falling more than 2.5 per cent and the rouble losing 2 per cent against the US dollar.
The upsurge in violence came as the EU begins deliberations on extending its Ukraine-related sanctions against Russia, which expire in July.
Senior officials are increasingly confident that the full range of sanctions will be extended into January 2016, allowing time for a review of the implementation of the Minsk ceasefire agreement.
Such a decision would be a blow to Moscow, which was banking on France, Italy and Spain leading calls for the measures to at least be eased in some areas to reflect a calmer situation in Ukraine.