Ukrainian government forces are continuing with an "anti-terrorist operation" which Kiev claims has eliminated 300 rebels and wounded 500 around the flashpoint city of Slovyansk.
The Ukrainian forces used aircraft, helicopters and artillery to switch the balance of power in the strategic city which rebels have controlled since April.
Rebel spokeswoman Stella Khorosheva said that the death toll in the eastern town "was rising continuously", but the figures could not be confirmed by the separatists.
Government spokesman Vladyslav Seleznyov said two soldiers had been killed during "heavy" fighting with 45 wounded.
Ukrainian interior minister Arsen Avakov requested that residents of Slovyansk and Kramatorsk remain indoors while "the active phase" of the operation against the rebels was taking place.
The interior ministry said separatist roadblocks and checkpoints had been destroyed in the operation.
The newly-elected Ukrainian government, headed by billionaire Petro Poroshenko, confirmed 181 people, 59 who were servicemen, had been killed by "terrorist activity" since fighting began in eastern Ukraine.
There has also been unrest in the eastern regions of Donetsk and Luhansk with Donetsk airport under the control of rebels before being won back by government forces. The fight for the site resulted in the deaths of 50 rebels.
Kiev claims Russia is stoking the unrest seen in eastern regions, allowing fighters to cross the border to assist pro-Russian rebels.
Moscow has denied any wrongdoing and called on Ukraine to end the operation and begin dialogue with the separatists.
US President Barack Obama has met with Poroshenko in Poland, calling him a "wise selection" to lead the country on its pro-European course. He said the country had the potential to become a thriving democracy.