Airport battle in eastern Ukraine

Rebel sources told Western news agencies on Tuesday that a truck carrying rebel dead had been parked outside a hospital in Donetsk. Government forces using combat jets struck at armed separatists, who had seized the airport on Monday.

A spokesman for the Kyiv interim government told Reuters that insurgents "who had been in the terminal have been eliminated."

Donetsk's mayor Alexander Lukyanchenko said 38 bodies of those involved in fighting had been counted around the airport. It was unclear how many were rebels, he said, adding that two civilians had also died.

In Kviy, interior minister Arsen Avakov said "the adversary suffered heavy losses. We have no losses," he added.

Late on Monday, the self-declared "people's governor" of Donetsk, Pavel Gubarev, had said government troops had fired at a truck carrying injured fighters.

In a fresh development early Tuesday, a four-storey hockey stadium was set ablaze when a group of unidentified men stormed it.

Battle 'in a different form'

The mounting death toll followed an announcement by Ukraine's newly elected president Petro Poroshenko that Kyiv's campaign against separatists would continue but "in a different form," coupled with dialog sought with Moscow.

Russian Foreign Minister Sergey Lavrov said Moscow was ready for dialog with Poroshenko but warned that insurgents must be included in any resolution of the crisis.

Poroshenko had ruled out any talks with "terrorists."

Associated Press journalists said gunfire continued through Monday night.

Officials had closed the new airport and nearby streets on Monday after truckloads of armed fighters turned up in Donetsk, the largest city in Ukraine's Donbas region with a population of 1 million residents.

Separatists had managed to block much of the voting in the Donetsk region during Sunday's election which saw Poroshenko, a pro-Western businessman, elected with 54 percent of the country's ballot.

The Ukrainian Defense Ministry said a MIG fighter jet and Mi-24 helicopter gunships carried out airstrikes against the separatists.

Truck wreckage sighted

Reuters said its correspondents had sighted the hulks of two Kamaz trucks of the type used by rebels outside the city center in the direction of the airport.

Russia's Interfax news agency quoted the separatists' press office as saying that two civilians had been killed during shooting outside Donetsk railway stations. There was no independent verification.

Progress in gas dispute?

On Monday, Europe's Energy Commissioner said Ukraine and Russia had made further progress in their dispute over gas prices.

Guenther Oettinger said the two governments would study his proposal that Ukraine pay Russia $2 billion by Thursday and a further $500 million by June 7.

We've achieved progress but we didn't achieve a breakthrough," Oettinger said in
Berlin. "I believe an agreement is possible."

ipj/msh (Reuters, AFP, dpa)