War fears hang over Ukraine as 12 die despite truce

Ukraine faced the threat Tuesday of a resumption of all-out warfare as 12 more people, mostly civilians, died in increasingly bloody clashes with pro-Russian rebels despite a truce deal.
The toll was one of the highest reported since the two rivals signed the Moscow-backed peace pact in the Belarussian capital Minsk on September 5.
Mortar and shelling attacks have killed 14 civilians since the weekend -- one of the deadliest spells in six months of fighting that has killed more than 3,300 people across the Russian-speaking east.
"We know that (the ceasefire) is not being implemented today. The shooting has not stopped," visiting US State Department official Victoria Nuland told a group of Kiev students after talks with Ukraine's new pro-Western team.
Insurgency leaders signed up to the deal but soon accused Kiev of breaking the ceasefire. Some have since vowed to keep fighting until all Ukrainian forces pull out of their self-proclaimed states.
The heaviest daily clashes are being waged around the northern outskirts of the main rebel-held city of Donetsk. Outnumbered government forces have been holding on to a besieged airport there since the end of May.
Kiev's military said Tuesday that the gunmen killed five soldiers at the shelled out transport hub -- once the busiest and most modern in east Ukraine -- since Monday afternoon.
The other seven people killed were civilians who died in various shootings and shelling incidents in the industrial Lugansk and Donetsk regions that border Russia and have been overrun by guerrillas since early April.
Nuland has been a hate figure in Moscow for openly backing weeks of pro-Western protests that claimed the lives of more than 100 people but succeeded in ousting a Russian-backed president in February.
The State Department's top official for European affairs risked further inflaming Moscow by blaming the spike in violence on Russian efforts to break up Ukraine in retaliation for its decision to leave its historic sphere of influence.
"If the Minsk agreement is fully implemented, we will begin to remove some sanctions on Russia. If it is not honoured, there will be further costs," Nuland said.
The punitive steps taken by Western allies prompted the International Monetary Fund to downgrade Russia's growth forecast to 0.2 percent for this year and 0.5 percent for 2015.
Russia has struck back by banning most EU and US food items and keeping Western companies from bidding for lucrative state procurement contracts.
The restrictions have been particularly painful for some European farmers and close Russian trading partners such as the Netherlands.
They have also deepened divisions between new EU members from ex-Soviet satellites and older European powers that rely heavily on Russian gas imports and take a more patient approach with the Kremlin.
Incoming EU foreign policy chief Federica Mogherini -- currently Italy's top diplomat -- said Russia is "still a strategic country and a neighbour" that needs "a mix of assertiveness and diplomacy".
Moscow said Tuesday that Russian Foreign Minister Sergei Lavrov and US Secretary of State John Kerry may meet in Paris for discussion focused on a possible lifting of the sanctions and ways of making both sides respect the ceasefire's terms.
- 'Corruption the biggest threat' -
Nuland has spent a fair portion of her three-day stay pressing the government to press ahead with strict anti-graft measures that won initial backing in parliament on Tuesday.
"The biggest threat to Ukraine’s economic future is corruption," she told the Kiev university students.
Western lenders have made a long-overdue fight against bribes and fraud one of their main demands on Kiev as they disburse some $27 billion (22 billion euros) in urgent aid.
Both the IMF and the World Bank also want the ex-Soviet nation -- its economy likely to shrink by nearly 10 percent this year -- to adopt structural reforms that could unleash future growth.
"Nobody gives money to corrupt countries and investors don't go to corrupt countries," Prime Minister Arseniy Yatsenyuk told lawmakers as they debated the anti-corruption legislation.
The measures will require top bureaucrats and judges to declare their own and their families' incomes and assets.
Special commissions would then probe any discrepancies between their lifestyles and incomes.
The second and final vote is expected next week.