The military said many of those killed, who included women and children, had been burned beyond recognition. Many bodies had been blown apart by the blast.

"We strongly condemn the shelling and rocketing of a convoy that was bearing internally displaced persons in Luhansk ... Sadly, they were trying to get away from the fighting and instead became victims of it," State Department spokeswoman Marie Harf told a news briefing in Washington.

Around 500 people a day have been fleeing Luhansk, a pro-Russian separatist stronghold that has been battered by months of fighting between rebels and Ukrainian forces and left almost entirely without water and electricity for more than two weeks.

Ukrainian government forces have been fighting separatists for four months in the Russian-speaking east of Ukraine.

The rebels have set up "people’s republics" and said they wanted to join Russia.

On Monday, Andrei Purgin, deputy prime minister of the self-proclaimed Donetsk People’s Republic claimed rebel forces did not have the military capability to conduct such an attack on the refugee convoy.

“The Ukrainians themselves have bombed the road constantly with airplanes and Grads. It seems they’ve now killed more civilians, like they’ve been doing for months now. We don’t have the ability to send Grads into that territory,” he said.

Ukraine says Russia, which seized the Crimean peninsula in March after a pro-Western government took power in Kiev, has orchestrated the uprisings and is arming the rebels with tanks, missiles and other heavy weaponry. Moscow denies this.