Donetsk, Ukraine: Thirteen people, including two children, were killed on Sunday in fierce clashes in the key insurgent holdout of Gorlivka in eastern Ukraine where government troops are battling rebels, local authorities said.

“As a result of military actions in Gorlivka 13 people have died, among them two children aged one and five,” the Donetsk regional administration said in a statement, adding that operations by medical teams in the crucial insurgent base, a city of some 250,000 around 45km north of Donetsk, were hampered by “constant shooting”.

An eyewitness told AFP that mortar fire rained down on the centre of the city after rebels warned that there would be “intense firing”.

“In the park I saw a man, a woman and a child dead on the ground,” local resident Ludmila said.

“Near the railway station a shop was destroyed, while the bus station was also on fire and dead people were lying around,” she said.

Ukraine’s military accused insurgent fighters of firing Grad rockets at residential blocks in the city “aiming to bring discredit to the Ukrainian army and frighten the non-combatants”.

A rebel commander from the self-proclaimed Donetsk People’s Republic told a press conference that the situation in Gorlivka was “fine for the moment”.

Seized by separatists in April, Gorlivka has been the headquarters for a hard core of insurgent militants, including an important rebel commander linked by Ukrainian security services to the downing of Malaysia Airlines flight MH17.