Numerous explosions rattled the night sky and thick smoke was visible on the horizon of Mariupol, a strategic government-held port city on the Azov Sea in the southeast of the country.
Residents spoke of their panic as the fighting erupted, with gunfire and shelling that damaged buildings and vehicles.
"Everyone is starting to flee," one 46-year-old Mariupol resident who gave her name only as Victoria told AFP.
"I'm frightened. I want peace but I think this ceasefire is finished, this is the third night we haven't been able to sleep."
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The 12-point pact was the first to gain the backing of both Kiev and Moscow after five months of fighting that has claimed around 2,800 lives and triggered the deepest crisis in East-West relations for a generation.
It was drawn up after the rebels -- reportedly backed by Russian troops and firepower -- launched a lightning counter-offensive across the southeast in late August that dramatically reversed recent gains by the Ukrainian army.
The fresh violence threatened a repeat of the unilateral ceasefire called by Kiev in June, which collapsed within days.
Both sides were already accusing each other yesterday of breaching the truce within hours of its signing in the Belarussian capital Minsk.
And pro-Russian separatists opposed to Kiev's rule still insist they will not give up their ambitions for an independent state in the industrial east.