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From Jim Sciutto and Max Foster, CNN

November 12, 2014 -- Updated 0139 GMT (0939 HKT)

STORY HIGHLIGHTS

(CNN) -- Gunfire crackles and flames scar battlefields in eastern Ukraine -- signs, officials warn, of a crumbling ceasefire in the volatile region.

And there's new fear that the long simmering battle may be about to explode to a deadly new level.

Gen. Philip M. Breedlove, NATO Supreme Allied Commander Europe, said he's concerned about the escalating violence and accused Moscow of violating the norms of Western civilization.

"The ceasefire is in name only at this point," he told reporters Tuesday. "The violence continues to increase day by day."

Ukraine's government and separatist leaders signed a ceasefire deal in September, raising hope that the monthslong conflict in eastern Ukraine was nearing an end.

But now, fighting between pro-Russian rebel forces and the Ukrainian military has returned to levels that preceded the ceasefire, a British security source who has detailed knowledge of the matter told CNN.

Russia has amassed some 8,000 troops along the Ukraine border, Pentagon officials and the British security source said.

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Ukraine violence flares as ceasefire collapses

From Jim Sciutto and Max Foster, CNN

updated 8:39 PM EST, Tue November 11, 2014

STORY HIGHLIGHTS

(CNN) -- Gunfire crackles and flames scar battlefields in eastern Ukraine -- signs, officials warn, of a crumbling ceasefire in the volatile region.

And there's new fear that the long simmering battle may be about to explode to a deadly new level.

Gen. Philip M. Breedlove, NATO Supreme Allied Commander Europe, said he's concerned about the escalating violence and accused Moscow of violating the norms of Western civilization.

"The ceasefire is in name only at this point," he told reporters Tuesday. "The violence continues to increase day by day."

Ukraine's government and separatist leaders signed a ceasefire deal in September, raising hope that the monthslong conflict in eastern Ukraine was nearing an end.

But now, fighting between pro-Russian rebel forces and the Ukrainian military has returned to levels that preceded the ceasefire, a British security source who has detailed knowledge of the matter told CNN.

Russia has amassed some 8,000 troops along the Ukraine border, Pentagon officials and the British security source said.

More here:
Ukraine violence flares

Sanctions

The United States and European Union have imposed economic sanctions on Moscow since Russia seized Ukraine's Crimea peninsula in March and began backing pro-Russian rebels who rose up in two eastern provinces.

Read MoreTank column crosses from Russia into Ukraine: Kiev military

The past week has seen the truce deteriorate, after the rebels staged elections and inaugurated leaders, steps Kiev said violated a Sept. 5 peace agreement.

Western countries believe Russia aims to establish a "frozen conflict": a separatist enclave similar to breakaway regions its troops have protected in much smaller ex-Soviet republics Georgia and Moldova for two decades.

That would make it more difficult for Ukraine to achieve its goal of joining the EU and weigh on efforts to revive an economy shattered by a year of political turmoil and war.

Kiev's fear is that Russia will try to expand the territory controlled by the separatists with another military push like one that turned the war's tide in the rebels' favor in August.

Read MoreUkraine: The pain is far from over

The immediate economic concern for Ukraine is the currency, as the sharp fall imperils its banks. The central bank abandoned its unofficial peg last week after spending $1.3 billion, around a tenth of its remaining reserves, to defend the hryvnia in the past month and a half.

"They're trying to show us that we have a floating exchange rate, but I prefer the term 'sinking' ... the market is in a phase that could be classified as panic-mode," a banker for a foreign bank's subsidiary in Ukraine told Reuters.

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Ukraine's currency plunges as fears grow

Ukraines military said the separatists battling government troops are regrouping and mobilizing forces across the countrys war-torn east.

Pro-Russian insurgents are reinforcing their positions on the outskirts of the port city of Mariupol and massing armored vehicles in other parts of the Donetsk region, Andriy Lysenko, a spokesman for the Ukrainian National Security and Defense Council, said at a briefing in Kiev yesterday, adding that a full mobilization was announced in four rebel-held towns.

The cease-fire negotiated two months ago is coming undone as Ukraine and its allies in the U.S. and Europe accuse Russia of continuing to arm rebels in eastern Ukraine. Russian President Vladimir Putin has denied military involvement. More than 4,000 people have been killed and about 9,000 wounded in the conflict, according to the United Nations.

Everything suggests that the parties are making renewed preparations for violent conflict, German Foreign Minister Frank-Walter Steinmeier told reporters at a foreign-policy conference in Berlin. We have to prevent that.

European Union foreign ministers will discuss restrictive measures against Russia when they meet next week, Maja Kocijancic, spokeswoman for EU foreign-affairs chief Federica Mogherini, told reporters in Brussels.

Ukrainian President Petro Poroshenko told German Chancellor Angela Merkel by phone yesterday that insurgents are failing to honor the truce accord signed Sept. 5 in Minsk, Belarus, according to a statement on Poroshenkos website.

Rebels shelled government troops more than 30 times yesterday, leaving four soldiers wounded, Vladyslav Seleznyov, a spokesman for Ukraines military, said on Facebook. More than 1,000 troops have died and some 4,000 have been wounded, as of Oct. 11, since military operations began in April, according to Lysenko.

The Organization for Security and Cooperation in Europe said its monitors yesterday saw a convoy of 43 unmarked military trucks move near the center of Donetsk, the biggest city in the conflict zone. Several of the vehicles were towing howitzers and multi-launch rocket systems, according to the OSCE.

We are certainly examining all reports that say weapons are being shipped into the region again, Merkel said. That certainly wouldnt contribute to stabilizing the situation.

Merkel said further economic penalties arent planned for now even as the EU is considering expanding sanctions on Russians to people associated with illegal elections in rebel-held areas of Ukraine. The blocs focus is on the humanitarian situation and actually getting a cease-fire, she said at a news conference in Berlin yesterday.

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Ukraine Says Rebels Massing Forces Amid Germanys Warning

Tanks in Ukraine - Column of Separatist Controlled Tanks Enter Donetsk
Subscribe for more http://goo.gl/bY5w6 --- A column of separatist controlled tanks have entered Donetsk Ukraine, allegedly given to them by Russia. This poses a problem for the Ukraine...

By: GlobalLeaks

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Tanks in Ukraine - Column of Separatist Controlled Tanks Enter Donetsk - Video