Russian-backed rebels claim they are close to encircling Ukrainian government forces in the exposed Ukrainian-held town of Debaltsevo, the eastmost Ukraine-held town in the conflict-torn Donbass region.

The rebel forces, posting on an internet bulletin used for announcements, claim that they have occupied high ground surrounding the town, while Ukrainian forces are trying to break out in the direction of the rebel-held chemicals town of Gorlovka, to the south-west of Debaltseve. The rebels also report they are attacking Lozove, a village directly to the west of Debaltseve, potentially cutting the town off from reinforcements.

Debaltseve, a town of 26000, currently forms a Ukrainian salient into rebel-held territory, allowing rebels to attack it from three sides in the hope of cutting it off. Several thousand Ukrainian soldiers are reported to hold Debaltseve.

"Rebels are constantly attacking Ukrainian government positions across the conflict zone with artillery, mortars, grenade launchers, tanks," Ukrainian security council spokesman Volodymyr Polyovy was quoted by newswires as saying at a briefing. “The situation is under control in Debaltseve (…) It is difficult but the army is holding up,” he added. 

Debaltseve residents quoted by Reuters confirmed that the town was under heavy rebel attack and “almost surrounded". Whereas fighting in the summer war involved Ukrainian forces advancing on towns rebels seized without use of military force, the current phase of fighting involves rebels attacking Kyiv-held population centres, causing significant damage and civilian casualties.

Ukraine's government declared a state of emergency in both the Donetsk and Luhansk regions on January 26, and said that seven Ukrainian soldiers had been killed and 24 wounded.

Debaltseve is located on the cross roads of the north-south route between the main rebel-held cities of Donetsk and Luhansk, and the east-west road leading from the Russian border to the Kramatorsk-Slovyansk agglomeration in the western area of Donetsk region, which was held by rebels in the spring of 2014 until Ukrainian government forces launched their “anti-terrorist operation” against the rebels. 

Rebel leader Aleksandr Zakharchenko was quoted on January 24 saying that rebels intended to recapture the whole of the Donetsk region. Other statements by rebels said they only wished to push Ukrainian forces back to stop artillery threatening the civilian population.

Viktor Medvedchuk, a pro-Russian former head of Ukraine's presidential administration,who acted as intermediary between the rebels and Kyiv in the run-up to the signing of the Minsk peace accords, is in talks with rebel leaders from both Donetsk and Luhansk regions, according to Interfax. The talks are being held in Donetsk city.

Ukrainian forces were badly encircled in a 'pocket' around the town of Ilovaisk at the end of August 2014, reportedly as Russian forces crossed the border. Ukraine has put total losses in the Ilovaisk pocket at around 200. The defeat prompted Ukraine to agree to a ceasefire, signed in Minsk on September 5. But the ceasefire was shaky from the start, with both sides accusing each other of violations, and appears to have broken down entirely. Rebels leader Zakharchenko was quoted as saying that there was no returning to its stipulations.