Kharkiv victim
There are reports that three people have died in an explosion at a peace rally in Kharkiv, Ukraine@jmsardo/Twitter

Three people have been reported killed and up to 10 wounded in what police describe as a "terrorist explosion" in the government-controlled city of Kharkiv, Ukraine during a peace rally marking one year since the overthrow of the pro-Russian government led by Viktor Yanukovych.

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According to some reports among those killed was Igor Tolmachev, one of the leaders of the Euromaiden uprising in Kiev.

Kharkiv police spokeswoman Natalia Zakharova was quoted as telling AFP that an investigation would be launched into the attack, which she said had been caused by an unidentified device on the course of the march near the city's Palace of Sport.

Marches were being held in Kharkiv, 120 miles from the frontline, as well as other cities including Kiev, though not in cities controlled by pro-Russian rebels.

Earlier in an exchange of prisoners between Ukraine and pro-Russian rebels 139 Ukrainians were swapped for 52 rebels. In a further positive sign, both sides agreed to begin pulling back heavy weapons from the front line. Preparation is expecting to begin imminently but the weapons might not be moved until Tuesday.

Despite the signing of a ceasefire heavy fighting has continued, particularly around the transport hub of Debaltseve. Since fighting began last April around 5,700 people have died in the conflict.

Western governments, particularly those of Germany and France, have been frantically trying to broker a diplomatic solution to the conflict.

In a sternly-worded speech US Secretary of State John Kerry, who is visiting London for talks with counterpart Philip Hammond, said more sanctions against Russia might be necessary unless the ceasefire can be re-established.

"If this failure continues, make no mistake, there will be further consequences including consequences that will place added strains on Russia's already troubled economy," warned Kerry.

There are fears the conflict could draw in neighbouring countries and relations between the West and Russia are at their worst since the height of the Cold War.

Russia has been criticised for "buzzing" Western air-space but Moscow claims Nato's expansion in the east is causing many of the problems.