Shelling in at least three cities in Eastern Ukraine Tuesday hit a home for the elderly, a school and several apartment blocks, adding to a rapidly growing civilian death toll.

Among the victims were five people killed when the seniors' home was hit by artillery fire in Luhansk, according to the separatist rebels in control there. Russian television showed images of bodies in wheelchairs covered with blankets.

In Donetsk, another rebel stronghold under fire by the Ukrainian forces, at least one person was killed when several shells hit an apartment block in the early afternoon.

An Associated Press reporter saw gaping holes in the side of a nine-storey apartment block after it was fired on. Around 50 people took refuge in a nearby underground car park and the area was heavy with the smell of household gas.

One resident, Lyubov Skorikh, ran out of her home after an explosion to seek shelter only to discover the body of her husband, Vladimir.

"I ran out ... An old woman told me, 'Look, there is a man lying there.' I didn't even think that could be my husband," she said. "But then I saw the shoes; they were his shoes. Do you understand? His shoes! My god, I lived with him for 45 years; he was such a good person."

The government has refrained to date from attacks on the centre of Donetsk and direct strikes on the city may mark an escalation in efforts to break the rebels' resolve there.

The use of unguided rockets in fighting between government troops and pro-Russian separatist rebels has been causing a notable increase in casualties in recent days and has drawn criticism from the UN and human rights groups.

And with turmoil raging across a swath of Ukraine's troubled east, international investigators were again prevented Tuesday from visiting the crash site of the Malaysia Airlines jet shot down earlier this month.

In Washington, U.S. Secretary of State John Kerry issued a new warning Tuesday that the U.S. and European Union are prepared to slap additional sanctions on Russia if it continues to ship weapons, funds and fighters across its border to support the separatists in Eastern Ukraine.

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U.S. Secretary of State John Kerry spoke with Russian Foreign Minister Sergey Lavrov on Tuesday about what he described as specific proposals to ease the violence in Ukraine. (Gary Cameron/Reuters)

Two European Union diplomats told The Associated Press that the EU has approved a  number of measures, including an arms embargo, a ban on the sale of dual use and sensitive technologies, and a ban on the sale of bonds and equities by state-owned Russian banks in European capital markets. They spoke on condition of anonymity because they were not authorized to comment publicly on the matter.

The measures were decided at a meeting of EU officials Tuesday.

Another EU official said eight names are also being added to the list of people subject to EU-wide asset freezes and travel bans, including four people close to Russian President Vladimir Putin.

Kerry said he spoke with Russian Foreign Minister Sergey Lavrov on Tuesday about what he described as specific proposals to ease the violence.

Rebels block railroad

Ukraine security spokesman Andriy Lysenko said that rebels had blocked the railroad out of Luhansk, barring residents from leaving the city.

"If we were earlier able to organize additional trains to and from Luhansk, to Kyiv, now they have completely blocked the railway line," Lysenko said.

He accused separatist fighters of using children as human shields and stopping cars from leaving Luhansk. It was not immediately possible to confirm those claims.

In Horlivka, a city besieged by government troops, the mayor's office reported Tuesday that 17 people, including three children, were killed as a result of shelling.

The mayor's office said there has been major damage to many homes and government offices in the centre of the city. It also said the top floor of a school was destroyed as a result of direct hit from a shell.

Rebels accuse the government of indiscriminately using heavy artillery against residential neighbourhoods in areas under their control.

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Ukrainian soldiers stand guard in the eastern Ukrainian town of Seversk earlier this month. Authorities say 22 civilians have been killed in the latest round of violence. (Gleb Garanich/Reuters)

A UN monitoring mission in Ukraine says there has been an alarming buildup of heavy weaponry in civilian areas of Donetsk and Luhansk — including artillery, tanks, rockets and missiles that are being used to inflict increasing casualties and damage to civilian infrastructure.

The UN said in a report this week that use of such weaponry could amount to a violation of international humanitarian law.

"There is an increase in the use of heavy weaponry in areas that are basically surrounded by public buildings," said Gianni Magazzeni, head of the UN office's branch that oversees Ukraine. "All international law needs to be applied and fully respected."

Ukraine's government has stated that it has banned use of artillery in heavily resided areas and in turn accuses separatists of targeting civilians in an effort to discredit the army.

The UN report acknowledged the government's promise not to bombard the cities of Donetsk and Luhansk. However, it said that "people trapped in areas controlled by the armed groups continue to be killed as the heavy shelling continues from both sides. Questions arise about the conformity of these attacks with the rules governing the conduct of hostilities."

The UN called for a "full and impartial investigation" of all incidents where civilians have been killed.

1,100 killed since mid-April

New York-based Human Rights Watch has been more categorical in its accusations against the government and last week produced what it said was evidence the army had fired on houses in the suburbs of Donetsk.

The UN has said that at least 1,129 people were killed between mid-April, when fighting began, and July 26.

Ukrainian troops have for several days encroached on the outskirts of Horlivka, which is just north of the regional centre and the main rebel stronghold, Donetsk.

Heavy fighting has also spread to other areas in the region, including towns not far from the crash site of Flight MH17.

Lysenko said Tuesday that 10 soldiers were killed and another 55 wounded in fighting over the past day.

A team of Dutch and Australian police officers and forensic experts is currently stationed in Donetsk in the hope of travelling to the fields where the Boeing 777 came down.

For the third day running, the delegation has been forced to cancel plans to travel to the area of the wreckage.