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Update | OSCE confirms its observers held by pro-Russian rebels in Ukraine have been released

Organisation for Security and Co-operation in Europe confirms its observers held in Slavyansk have been released

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Foreign observer Colonel Axel Schneider (left) was freed. Photo: AP

Ukrainian soldiers and pro-Russian rebels fought fierce battles yesterday around a flashpoint town, with only a small reprieve to allow passage of a freed team of OSCE inspectors.

More than 50 people have died in two days of clashes nationwide - most of them in a horrific inferno amid street clashes in the southern city of Odessa.

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In the east, the military stepped up its assault on rebels in the flashpoint town of Slavyansk yesterday.

The bloodshed was plunging the international crisis over the ex-Soviet republic into dangerous new territory.

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Russia said it would now be "absurd" for the country - whose Crimea peninsula it annexed in March - to hold a planned May 25 presidential election.

That opened the risk of sweeping US sanctions designed to target whole sectors of the Russian economy after President Barack Obama warned of punishment if perceived Moscow meddling scuppered the poll.

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