Ukraine's first big win over rebels dims truce hopes

Western-backed President Petro Poroshenko called the moment when his troops hoisted the Ukrainian flag over the militias' seat of power in Slavyansk "a turning point" in a campaign that has killed nearly 500 people and inflamed East-West ties.

The rebels admitted suffering heavy losses while abandoning the strategic city nearly three months to the day after its capture marked the onset of a new and even more bloody chapter in Ukraine's worst crisis since independence in 1991.

Most analysts think Poroshenko desperately needed a battlefield success one month into his presidency to secure the trust of Ukrainians frustrated by their underfunded army's inability to stand up to what they see as Russian aggression.

"This is not a full victory and no time for fireworks," the 48-year-old chocolate baron cautioned in a national television address.

He noted the insurgents were now regrouping around the million-strong eastern industrial hub of Donetsk and vowed to flush out "terrorists who are entrenching themselves in large cities".

A top commander in the Ukrainian irregular forces' Donbass battalion on Sunday reported recapturing the cities of Druzhkivka and Kostiantynivka just south of Slavyansk.

But he also urged residents not to walk the streets at night because "this can be dangerous".

- Russia pushes truce -

The surge of optimism in Kiev has only added to already strong pressure on Poroshenko not to agree to another truce with the insurgents, which is being pushed hard by Ukraine's Western allies.

Poroshenko tore up a 10-day ceasefire last Monday, citing unceasing rebel attacks that killed more than 20 soldiers and -- according to both Washington and Kiev -- allowed the separatists to stock up on new supplies of heavy Russian arms.

Uneasy EU leaders are hoping that a new truce and a Kremlin promise not to meddle can take pressure off the bloc to adopt sweeping sanctions that could damage their own strong energy and financial ties with Russia.

Poroshenko hesitantly invited separatist leaders and a Russian envoy to attend European-brokered discussions about a new ceasefire on Saturday.

The call had gone unanswered by Moscow and the rebel command. But Russia appeared ready to talk again after the fall of Slavyansk.

Russian Foreign Minister Sergey Lavrov stressed to his French and German counterpart late on Saturday the importance of "reaching an agreement between Kiev and the southeast of Ukraine on an unconditional and lasting ceasefire".

Lavrov specifically cited the "rapid escalation of the situation that comes amid an intensified military operation by the Ukrainian authorities".

- Rebels regroup -

The withdrawal from Slavyansk was led by senior militia commander Igor Strelkov -- alleged by Kiev to be a colonel in Russia's GRU military intelligence unit.

Kiev believes this supports Western claims that Moscow is covertly backing the uprising to both punish the new leaders for the February ouster of a Kremlin-backed administration and keep control over Russian-speaking eastern regions of Ukraine.

Strelkov on Saturday lashed out at Russian President Vladimir Putin on Twitter for seemingly going back on his promise to use "all available means" to protect his compatriots in Ukraine -- a neighbour the Kremlin chief referred to as "New Russia".

But the 43-year-old rebel commander later told Moscow-backed television that he was busy plotting a counter-offensive that he himself would lead.

"I intend to issue an order (on Monday) creating a central military council that will include all the major field commanders," Strelkov told the LifeNews channel.

"This agency will help coordinate how we intend to defend the Donetsk People's Republic and, possibly, a part of the Lugansk People's Republic," he said in reference to the other separatist region of eastern Ukraine.