Ukraine peace talks down to wire

The US has voiced scepticism about whether a Ukraine peace deal can be reached with Russia. (AAP)

Fighting continues in Ukraine as diplomats scramble to finalise a peace deal ahead of a summit in Minsk.

Diplomats have scrambled to finalise a peace deal for war-torn Ukraine ahead of a crunch summit in Minsk, with the warring sides pushing to gain ground ahead of any truce.

Fighting in the east killed at least 12 people, including seven Ukrainian troops, as pro-Russia rebels sought to encircle railway hub Deblatseve, and Ukrainian forces launched a counter-offensive around the strategic port of Mariupol.

Ukrainian forces took control of three villages east of Mariupol, around 90 kilometres south of rebel stronghold Donetsk, and fierce fighting was going on for control of two more, senior interior ministry adviser Zoryan Shkiryak said.

Rebels, diplomats and mediators gathered on Tuesday in the Belarussian capital to bridge gaps on a possible peace deal, which the leaders of Ukraine, Russia, France and Germany hope to come and sign in Minsk on Wednesday.

Rebel negotiator Denis Pushilin told the separatists' news agency that he was heading to Minsk for talks with mediators from the Organisation for Security and Co-operation in Europe (OSCE) as well as Russian and Ukrainian representatives.

French President Francois Hollande and German Chancellor Angela Merkel have been conducting frantic diplomacy, taking the "last chance" deal to Ukrainian President Petro Poroshenko and Russian leader Vladimir Putin.

Merkel then headed to Washington for lengthy talks with US President Barack Obama Monday on the peace plan to defuse fighting that has killed at least 5400 people since April.

Obama agreed to hold off on sending arms to Ukraine until truce efforts have played out, voicing hope that a deal could be reached to end the 10-month conflict on the eastern edge of Europe.

Proponents of sending arms to Ukrainian forces argue Kiev needs the weapons to counter what they say is a flow of arms and troops by Russia. Moscow denies arming the rebels.

Merkel has opposed sending arms, warning it would further escalate a war that Ukraine cannot win against the better equipped pro-Russian forces, but some in the West feel hi-tech weapons could at least make the conflict more costly and painful for Russia.

Merkel acknowledged that a drive to get Putin to put his name to a deal may not succeed.

"We have no guarantee," she said in Washington.

"I cannot give you a guarantee for the outcome of the Wednesday talks and maybe nothing will come out of it."

Ahead of the Minsk summit, the European Union decided to hold off implementing new sanctions against Russia, giving space for talks.

EU foreign ministers had been set to formally sign off on adding 19 more people to a sanctions list over Moscow's backing of the separatists.

Putin has warned that a "number of points" still needed to be agreed before the Minsk meeting can take place.

Based on a largely ignored peace deal agreed in September in Minsk, the new plan may extend rebel control over territory seized in recent weeks, around 500 square kilometres, although Kiev is adamant the demarcation line agreed in September should not be shifted.

Hollande has said the proposal includes the creation of a 50 to 70-kilometre (31 to 44-mile) demilitarised zone around the current frontline.

Source AAP

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