Ukraine's president says he will grant more autonomy to separatists in the east to keep the country together.
Petro Poroshenko said the current ceasefire had changed the situation "drastically", despite reports that rebels had captured another town.
One rebel leader in Donetsk dismissed his comments and said they intended to break away and become independent.
The ceasefire came into effect last Friday in a deal in Belarus backed by Ukraine, the separatists and Russia.
More than 2,600 people have been killed since fighting between pro-Russian rebels and government forces erupted in April.
Mr Poroshenko and Russian President Vladimir Putin spoke by phone on Tuesday and said they were satisfied with how it was holding, a Kremlin official said on Wednesday.
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