Russian President Vladimir Putin said yesterday a deal to end fighting in eastern Ukraine could be reached this week - a clear attempt to show the West he was trying to de-escalate the conflict despite renewed shelling.
After speaking to Ukraine's leader, Petro Poroshenko, Putin said their views on ending the violence were "very close" and Kiev and the rebels could reach an agreement by tomorrow.
But hopes of peace were clouded by Western concerns that the announcement was timed by the Kremlin to wrong-foot Nato on the eve of a summit that will discuss the crisis and new shelling of the rebel stronghold of Donetsk in eastern Ukraine.
US President Barack Obama said a ceasefire would succeed only if Moscow stopped sending troops to Ukraine.
"The parties reached mutual understanding on the steps that will facilitate the establishment of peace," Poroshenko's office said, amending an earlier statement that had spoken of agreement on a "permanent ceasefire".
Kremlin spokesman Dmitry Peskov said the leaders agreed on steps towards peace but not a ceasefire because Russia was not a party to the conflict, which has killed more than 2,600 people since April and caused the worst crisis in relations between Russia and the West since the cold war.
Putin sounded upbeat in comments to reporters during a visit to Mongolia.
"Our views on the way to resolve the conflict, as it seemed to me, are very close," he said, outlining the seven steps he had put forward to secure a resolution to the crisis.
These steps, he suggested, should include a prisoner exchange and the creation of a humanitarian corridor for refugees and aid supplies. He called for Ukrainian troops to pull back and for rebels to cease offensive operations.
The separatists said no ceasefire was possible without a pullback by Ukraine. The Interfax news agency quoted top rebel commander Miroslav Rudenko as saying "there'll be no sense in a military solution to the conflict" if Kiev was to withdraw its troops.
The West accuses Russia of arming the rebels and sending troops into Ukraine to turn the tide of fighting. Moscow denies the charges.
"We have consistently supported the effort of President Poroshenko of achieving a meaningful ceasefire that could lead to a political settlement," Obama said.
"So far it hasn't helped, either because Russia has not been serious about it or it's pretended that it's not controlling the separatists, and separatists, when they thought it was to their advantage, have not abided by the ceasefire."
Additional reporting by Associated Press