Heavy fighting broke out Monday in the eastern Ukrainian city of Luhansk as NATO diplomats held talks in Brussels with Russia on the crisis.

Pro-Russian separatists said at least five people were killed and at least 10 injured in an airstrike on their headquarters in the regional government building in central Luhansk, Russia’s Interfax news agency reported.

A local health official said at least two people were killed and dozens injured, the report said.

A massive explosion rocked the city centre about 4 pm (1300 GMT) after fighter jets started circling over Luhansk, local media reported.

Government officials suggested the separatists had caused the explosion, with Defence Ministry spokesman Oleksiy Dmytrashkivskiy telling Ukrainian media that careless handling of explosives was a likely explanation.

The UNN news agency later quoted a Luhansk police source as saying the explosion was probably caused by a heat—seeking anti—aircraft missile fired from the separatist—occupied state security building.

“The rocket changed course and hit an air conditioner fixed outside an administration window,” the report quoted an unnamed witness as saying.

Photos showed black smoke coming from a window on the fourth floor and heavy damage just below. The rest of the building’s facade appeared intact.

Luhansk was gripped by fighting since early Monday, when separatists attacked the local headquarters of the Ukrainian border patrol.

The border agency said about 500 fighters with mortars and automatic weapons tried to storm the building. Accusing the attackers of using civilians as “human shields,” the agency said at least five fighters had been killed and 15 people injured, including seven border guard officers.

The Luhansk region borders Russia, and local border patrols have regularly clashed with fighters trying to cross from Russia into Ukraine.

Pro—Russian separatists controlled much of Luhansk and the neighbouring Donetsk region since April and taken dozens of hostages.

The Organization for Security and Co—operation in Europe (OSCE) said Monday that it still had no contact with two teams of observers who went missing last week in the area despite claims by separatists that the foreign observers have been released.

At the UN Security Council, Russia introduced a draft resolution demanding cessation of hostilities by Ukraine and establishment of “humanitarian corridors” to allow civilians to leave and to ensure access to humanitarian aid.

Vitaly Churkin, Russian ambassador to the UN, said the humanitarian situation in south—eastern Ukraine was “dire” and thousands of civilians could soon be in need of humanitarian assistance if the hostilities do not end.

US State Department spokeswoman Jen Psaki called the draft resolution “hypocritical,” saying Russia was not doing anything to stop violence by Russia—backed separatists.

Yuriy Sergeyev, Ukrainian ambassador to the UN, said the resolution was “needless” and called on Russia to meet obligations — under an agreement in April in Geneva — including stopping flows of arms and “mercenaries” into Ukraine.

Kiev and the West accuse Russia of fomenting the unrest in eastern Ukraine. The crisis has led NATO to step up its military presence in eastern member countries.

NATO ambassadors met in Brussels with Russian envoy Alexander Grushko for the first time since March, when the alliance suspended all practical cooperation with Russia.

NATO spokeswoman Oana Lungescu said after the meeting that the alliance’s and Moscow’s views on Ukraine remain “fundamentally different.” “We want to improve the climate of our relations, but to do so, Russia must show that it is ready to respect the same rules as anyone else,” NATO Secretary General Anders Fogh Rasmussen said.

NATO called on Russia to engage constructively with Ukrainian president—elect Petro Poroshenko. The alliance’s defence ministers are due Tuesday to discuss further stepping up NATO’s reaction to the crisis as well as its long—term implications.

The Ukrainian election commission confirmed Monday that Poroshenko won the May 25 presidential election with 54.7 per cent of the vote.

US Vice President Joe Biden is to lead the US delegation Saturday at Poroshenko’s inauguration.

In Brussels, the heads of the Russian energy company Gazprom and Ukraine’s Naftogas reached a tentative deal in a row over gas supplies, the EU’s top energy official said.

Guenther Oettinger said the two companies had “a shared proposal for a bulk deal: for the resolution of unpaid invoices through a redemption plan and for an acceptable price for both sides to be charged in future.” A final round of talks could take place in the coming days after both governments make legal, financial and economic evaluations of the proposal, he said. Both sides agreed there would be no interruption to deliveries, no need for Ukraine to make prepayments and no court referral in the dispute until then, Oettinger said.

The future gas price would lie between 268 and 485 dollars per 1,000 cubic metres, he said. Ukraine had previously paid 268 dollars per 1,000 cubic metres, while Russia has raised the price to 485.5 dollars.

Earlier, Russia confirmed that Ukraine had paid a first instalment of 786.4 million dollars. Russia says Ukraine’s total gas debt is 5.2 billion dollars.

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