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Ukrainian forces near Slaviansk

Ukrainian forces near Slaviansk. Reuters reported blasts near Donetsk, smoke by the airport,Ukrainian forces near Slaviansk. Reuters reported loud artillery blasts near Donetsk on Wednesday, with smoke rising by the airport. Photograph: Gleb Garanich/Reuters

Vladimir Putin on Wednesday issued a seven-point peace plan for eastern Ukraine, hours after his Ukrainian counterpart said there was an agreement for a "permanent ceasefire" for the region.

But in a day of confusing mixed messages, Arseny Yatsenyuk, Ukraine's prime minister, dismissed the peace plan, which Putin had apparently jotted down on a flight to Mongolia, calling it a trap.

On the ground there was no sign of a ceasefire. Clashes continued as both rebels and Ukrainian volunteers said they would continue fighting.

Putin called on Russian-backed insurgents in the east to stop advancing, and urged Ukraine to withdraw its troops from the region.

Coming on the eve of the Nato summit in Wales, where Russia's actions over Ukraine will be top of the agenda, it was not clear if the Russian move would be enough to prevent a further round of EU sanctions against Moscow.

On Wednesday evening France announced it was suspending the delivery of a huge warship to Russia, due in October.

The surprise ceasefire announcement came after Putin and the Ukrainian president, Petro Poroshenko, spoke on the phone Wednesday morning. Poroshenko wrote on Twitter: "As a result of my telephone conversation with the Russian president we reached an agreement on a permanent ceasefire on Donbass."

Soon after, Poroshenko backtracked from the "permanent" claim and the Russian president said the pair had only discussed a ceasefire regime that could be in place by the end of the week.

Putin's spokesman, Dmitry Peskov, told Russian agencies the two leaders had not agreed on a ceasefire – as Russia was not party to the fighting – but had "discussed how to end the conflict".

Later, speaking to reporters on a day trip to the Mongolian capital, Ulaanbaatar, Putin said he had drafted a handwritten seven-point plan for an end to hostilities in eastern Ukraine while on his flight to the city. He said he hoped that a deal would finally be reached on Friday, when both sides were expected to meet in Minsk.

His plan would involve Ukrainian armed forces and volunteer battalions pulling back, a suspension of air strikes, an "exchange of persons kept in captivity" and humanitarian corridors opened.
Ivan Saenko, 89, amid the ruins of his house in Ilovaysk, where Ukrainian forces suffered casualties Ivan Saenko, 89, amid the ruins of his house in Ilovaysk. Ukrainian forces suffered heavy losses there after rebels encircled the town. Photo: Alexander Ermochenko/EPA

Putin said he hoped Ukraine would take an active role in new talks in Minsk, Belarus, on Friday, towards "a final and comprehensive settlement of the situation in the south-eastern Ukraine, with full and unconditional assurance of the legitimate rights of the people who live there".

Analysts have suggested that the Kremlin may want to establish some kind of quasi-autonomous state in east Ukraine with nominal control from Kiev, in order to have leverage over the pro-European government in the city.

It was unclear if Putin and Poroshenko had actually reached a substantial agreement, and whether Ukrainian society would accept a ceasefire, essentially legitimising rebel gains, if they had. One adviser to a top Ukrainian official told the Guardian that Poroshenko's ceasefire announcement had been "a brainfart" and that "nobody believes in it". There were reports, meanwhile, of fighting around the city of Donetsk.

On Wednesday Yatsenyuk branded Russia a "terrorist state" and said Kiev would build a border wall between the two countries. He also said he hoped Ukraine would join Nato's alliance. Putin's plan was "an attempt to confuse the international community" and prevent new sanctions he suggested, offering his own peace plan, comprised of a single point: "Russia withdraws their regular troops, mercenaries and terrorists from Ukrainian territory. Then peace will be reinstated in Ukraine."

Arriving in Estonia on a trip intended to show solidarity with Nato allies before the Wales summit, the US president, Barack Obama, was cautious about the ceasefire news and accused Russia of a "brazen assault" on Ukraine.

"We haven't seen a lot of follow-up on so-called announced ceasefires," Obama said. "Having said that, if in fact Russia is prepared to stop financing, arming, training, in many cases joining, with Russian troops, activities in Ukraine and is serious about a political settlement, that is something we all hope for."

The Pentagon said that 200 US soldiers would take part in a training exercise in western Ukraine starting next week.

On Wednesday, in France, after a defence committee meeting in Paris, the government said that it could not go ahead with the delivery of warships to Russia, citing Moscow's actions in east Ukraine.

"The president of the republic has concluded that despite the prospect of a ceasefire, which has yet to be confirmed and put in place, the conditions under which France could authorise the delivery of the first helicopter carrier are not in place," the statement said.

France is building two of the Mistral-type helicopter carriers for Moscow at a shipyard in Saint Nazaire. The controversial €1.2bn deal was signed in 2011 and the first ship, the Vladivostok, was due to be delivered next month.

The potential ceasefire in east Ukraine follows crushing defeats for Kiev's forces. Putin has called for a ceasefire repeatedly, whereas Kiev has been keen to win militarily before finding a political solution. However, the apparent injection of Russian firepower has proved too much for Kiev's forces.

At a press conference in Mariupol, Serhiy Taruta, the Kiev-backed governor of the Donetsk region, said he backed the peace plan in principle, but the most important thing was to secure the border with Russia.If Russia was unable to send fighters and armour over the border, he said, "we could finish things here in a month". It was unclear how this could occur if a ceasefire was in place, given that Moscow-backed rebels now control a large amount of territory. In Donetsk, rebel leaders said they would ignore a ceasefire until there were no Ukrainian troops left in the territory.

This week, at negotiations in Minsk, a rebels' spokesman said that the region could stay in Ukraine if certain conditions were met, while other leaders have said that only full independence from Kiev would do.

Reuters reported loud artillery explosions on the outskirts of Donetsk during the day on Wednesday, with clouds of smoke rising from near the city's airport. Rebels stationed in the small town of Guselshchikove said they had heard about the announced ceasefire and were waiting to see what the Ukrainian forces would do.

"We are for peace," said the local commander, who would identify himself only as Sergei. "We're just defending our land."

"It doesn't depend on us, but on Poroshenko," said another rebel, who gave his nom de guerre as "the Rook". He said Ukrainian forces would have to withdraw from the borders of the self-declared Donetsk People's Republic, including Mariupol, before there could be peace.

Although the rebels said they were local, they did not speak with local accents. Their kit looked new and included two modern Dragunov sniper rifles and two rocket-propelled grenade launchers.

In another sign of pro-Russia forces' steady advance from the north towards Mariupol, rebels were in control of the key road junction of Telmanove on Tuesday, seized in the previous 24 hours. Men with machine guns were moving about the town and had stacked a few tyres to create an impromptu checkpoint on the western approach to the city.

Fighters from Mariupol's Azov battalion, volunteers with neo-Nazi leanings, said they would continue to follow orders from Kiev, but their uncompromising rhetoric suggested any deal between Poroshenko and Putin could test that loyalty.

The pro-Russian side "will announce a ceasefire and then not follow it, and we won't be able to shoot back, just like the last ceasefire," said a squad commander with the nom de guerre of Apis, referring to a failed ceasefire announced by Porohsenko in June. If Kiev offered his home province of Luhansk autonomy, he would fight on, Apis said.

"If I need to I will leave the battalion. As I private citizen I will liberate what belongs to me, and I think others like this will appear as well."

More than 2,000 people have died in the conflict in east Ukraine since it began this year, with Russian-backed groups seizing administrative buildings in eastern cities shortly after the Russian annexation of Crimea.

Kiev says the uprising was directed from Moscow all along, though it has tapped into genuine local grievances about rule from Kiev and the new government, which replaced the president Viktor Yanukovych after the Maidan revolution in February.

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