Fighting in eastern Ukraine leaves dozens dead.

DONETSK, Ukraine (Reuters) Intense fighting between Ukrainian troops and pro-Russian rebels in the east of the country killed dozens of civilians, soldiers and rebels, as the government intensified an offensive on Tuesday to encircle the separatists and approached the site of the crash of Malaysia Airlines flight MH17.

Bombs hit the center of Donetsk, a city that before the war had 1 million inhabitants and whose population fears being trapped in the middle of the battle between advancing Ukrainian troops and Russian-backed rebels who vow to resist.

In Brussels, European officials met to discuss imposing broad sanctions on certain sectors of the Russian economy, a move that would mark the beginning of a new phase in the worst confrontation between Russia and the West since the Cold War.

Ukrainian forces have been pushing the rebels back toward their two main urban strongholds, Donetsk and Luhansk, and are trying to encircle them in several places, including a wider area where the Malaysia Airlines plane crashed on July 17, killing 298 people, mostly Dutch citizens.

In Donetsk, the body of a man lay on the rubble of a 10-story building heavily damaged by bombing on the outskirts of the city center. The side of the building was shattered. Rebels at the scene were collecting body parts.

"There, those are their 'separatists.' That's their 'rebel commander,'" said a visibly shaken woman in her 60s, pointing to the body. "They're killing residents. They're killing the people, ordinary people."

Another middle-aged woman, who identified herself as Katarina, ran out of the building next door carrying two bags. "That's it! I can't live on this death row anymore!" she said. "I'm running away! I don't know where to!"

I LOOK FOR

Municipal authorities said that up to 17 people, including children, were killed in fighting on Monday night in the city of Horlivka, a rebel stronghold north of Donetsk that has been plagued by intense clashes between rival forces in recent days.

In the city of Luhansk, authorities reported that five children were killed when bombs fell on a nursing home.

"The enemy is throwing everything it has into the battle to complete the encirclement of the republic," rebel commander Igor Strelkov told reporters on Monday night, referring to the self-proclaimed "Donetsk People's Republic."

A rebel source in Donetsk said reinforcements, including military equipment and fighters, arrived across the border with Russia near the location. Reuters could not independently confirm the information.

Rebel leaders publicly insist that Moscow is not supplying them. Russia also denies accusations by Western powers that it is supporting the rebels with weapons and troops.

A spokesman for the Ukrainian Security Council, Andriy Lysenko, accused Russia of bombing military targets on Ukrainian territory across the border to aid the rebels.

Leaders from the US and major European powers agreed, via a teleconference on Monday, to impose sanctions on the financial, technology, and defense sectors of the Russian economy, but so far have avoided measures that would affect the Russian economy more broadly.

A humanitarian corridor was to be opened for six hours on Tuesday in Luhansk to allow residents to flee the fighting, but authorities said they could not guarantee their safety.

The UN says more than 100.00 people have already fled the turbulent eastern Ukraine.

(Reporting by Natalia Zinets and Gabriela Baczynska in Kyiv, Aleksandar Vasovic in Donetsk)