Ukraine says it has seized a key town near the rebel stronghold of Donetsk, as fighting intensifies in the east.
Pro-Russia separatists were driven out of Avdiivka on Wednesday, the army says. The strategic town is near the airport and train station in Donetsk.
Heavy fighting around Donetsk has again prevented international experts from reaching the crash site of flight MH17.
Details of fresh EU sanctions against Russia for its support to the Ukrainian rebels will be revealed on Wednesday.
ShellingAlmost two weeks after the Malaysia Airlines jet came down, international monitors from the Organization for the Security and Co-operation of Europe were prevented from reaching the crash site again on Wednesday.
They were turned back to Donetsk after being stopped at a separatist checkpoint, with evidence of fighting ahead smoke rising in the distance from fighting, says the BBC's Jonathan Beale.
There is one theory that it is not in the interest of the Ukrainian army for them to let international observers into the crash site because their presence in the area would restrict the army's offensive, says the BBC's Tom Burridge in Kharkiv.
Of course neither side would want international observers or police to be caught in the crossfire and the Ukrainian army may want to keep its momentum going, he adds.
Regional officials in Donetsk said on Wednesday that 19 people had been killed in fighting in the past 24 hours. Several apartment buildings have been hit by shelling in the government forces' bid to retake the city, they added.
Ukraine says its troops have also entered the towns of Shakhtarsk and Torez in Donetsk region, and Lutuhyne in Luhansk region.
Amid the fighting, a group of hackers sympathetic to the rebels says it has disabled the website of the Ukrainian president.
Meanwhile, the US has announced new economic sanctions against Russia which has widened to include key sectors of the economy - energy, arms and finance.
US nationals and people living in America will no longer be able to bank with three Russian banks - the VTB, the Bank of Moscow, and the Russian Agriculture Bank (Rosselkhozbank).
Peace 'more important'The EU earlier expanded its sanctions, targeting the oil sector, defence equipment and sensitive technologies, details of which will be revealed later on Wednesday.
Sanctions are starting to bite in Russia, with the share prices of VTB bank and the rouble down, as borrowers are squeezed by rising interest rates, says the BBC's Daniel Sandford in Moscow.
Germany's Economy Minister Sigmar Gabriel signalled on Wednesday that the sanctions may hurt the German economy, which has strong trade links with Russia.
"Nonetheless at a time of war and peace, economic policy is not the main consideration," he told journalists.
The list of 87 targets of EU sanctions now includes the heads of the Federal Security Service (FSB) and foreign intelligence, the president of Chechnya, as well as two Crimean energy firms.
However, UK company BP, which owns nearly 20% of Russian state oil giant Rosneft, has warned that further sanctions against Russia could "adversely impact" its performance.
Sanctions are having significant costs on Russia, with its central bank spending tens of billions of dollars in order to defend the rouble, a senior state department official has told the BBC.
Russian press reacts to sanctions- "The Russian authorities have been responding chaotically to emerging threats by taking instant ad hoc measures, but failing to calculate their systemic consequences" - Nezavisimaya Gazeta
- "Sources in Russian diplomatic circles say the Russian leadership hopes that the sectoral sanctions will be considerably less stringent when approved at the top level" - Kommersant
- "It is possible to say now that the Russian authorities mistakenly believed that Europeans would not risk introducing sectoral sanctions for fear that they might backfire" - Novyye Izvestiya
- "Russia is different not only because its economy is much more integrated into the world one. Russia is a nuclear power and a member of the World Trade Organization, which limits the possibility of pressure" - Vedomosti
Russia has come under increased pressure to end its support for the rebels, who Western governments believe were behind the downing of the Malaysia Airlines jet that killed 298 people in eastern Ukraine.
Moscow has also been accused by the EU and US of supplying heavy weapons to the rebels - a charge it denies.
"If Russia continues on this current path, the costs on Russia will continue to grow," said US President Barack Obama, announcing the new round of sanctions.
But Australia's Tony Abbott said on Wednesday his government was focusing on retrieving Australian victims from the MH17 wreckage: "At the moment our focus is not on sanctions, our focus is on bringing home our dead as quickly as we humanly can."
His comments follow that of US Secretary of State John Kerry, who urged Russia and the rebels to allow Western investigators full access to the crash site.
"They still can't even ensure that all of the victims' remains have been removed, and that is an unsupportable burden for any family to have to bear, and it is an unacceptable standard for behaviour, period," he said.
Russia's foreign ministry issued a statement on Wednesday saying that it was puzzled by President Obama's comments that Russia was not co-operating with an international investigation into the crash, Reuters reports.
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