THE Russian Foreign Ministry has welcomed as a "step in the right direction" a decision by the Ukrainian parliament to grant special status to two eastern regions where pro-Russian separatists are fighting to split from Kiev.

Ukraine passed laws granting temporary and limited self-rule to the Donetsk and Luhansk regions yesterday in an attempt to blunt the independence drive of separatist fighters there.

The Russian foreign ministry said: "We expect all provisions of the law will be responsibly implemented.

"It's clear attempts to revoke it or change its essence would again throw the situation towards a confrontation, undermine efforts to normalise the situation by the international community and sensible politicians in the country."

Moscow says it will protect the rights of the Russian-speaking population in east Ukraine but denies sending arms to the rebels fighting Kiev troops there. Unconvinced, the West has imposed sanctions on Russia, which it accuses of fanning unrest in the east after Moscow annexed Crimea from Kiev in March.

Moscow has also opposed Kiev's drive to integrate with the West, one of the key points of contention in the conflict between Russia and Ukraine that has dragged ties between the Kremlin and the West to new post-Cold War lows.

In a concession to Russia, the EU and Ukraine agreed last week to delay the implementation of their free-trade pact until the end of next year.

The Russian Foreign Ministry said it hoped that agreement would be honoured, adding it reserved the right to retaliate if it was not.

A ceasefire agreed earlier this month has largely held but shelling in the rebel-held eastern Ukraine city of Donetsk killed two people and wounded three others yesterday.

The city council confirmed shells had hit a neighbourhood in the north of the city, where fighting centred on the government-controlled airport has caught many residential neighbourhoods in the crossfire.

The remains of what appeared to be a Grad rocket could be seen in a burned-out building. Despite the ceasefire, civilian casualties have continued to rise, adding to the estimated 3,000 people killed.

On Tuesday, the Ukrainian parliament passed two laws that would grant temporary self-rule to the rebellious regions, as well as amnesty for many rebel fighters.

But while the rebels' preliminary response to those bills was unusually positive, top rebel leader Alexander Zakharchenko said yesterday he would not accept key aspects of them.

The laws, which allow for three years of self-rule and grant amnesty to rebels not accused of serious crimes, call for local elections to be held in the region in December.

But Mr Zakharchenko said the Donetsk rebels "will decide ourselves when and what kind of elections we will have", adding: "We will not have any elections organised by Ukraine."

That could undermine peace talks under way in the Belarusian capital Minsk between Ukraine, Russia and the Russia-backed rebels to bring an end to the conflict.

Mr Zakharchenko said he would not travel to Minsk for an upcoming session of the peace talks overseen by the Organisation for Security and Cooperation in Europe.