Ukrainian government forces battled separatists with artillery and automatic weapons on Wednesday as fighting raged for a second straight day in and around the eastern town of Slaviansk.

Ukrainian government forces battled separatists with artillery and automatic weapons on Wednesday as fighting raged for a second straight day in and around the eastern town of Slaviansk, forcing many frightened residents to flee.

The Kiev government, trying to break rebellions by militias which it fears could lead to dismemberment of the country, said more than 300 rebels had been killed in the past 24 hours in the "anti-terrorist operation" centered on the town, a strategically located separatist stronghold.

Rebels denied this and said losses by the Ukrainian side during a government offensive which began on Tuesday exceeded theirs.

Fleeing the fighting, families came through the barbed wire checkpoint in small groups, taking with them only as much as they could carry.

A spokesman for government forces, Vladyslav Seleznyov, said two servicemen had been killed and 45 wounded in "heavy" fighting since the government launched its offensive near Slaviansk, using aircraft, helicopters and artillery.

Separatists, who have controlled the town since early in April, denied the government's casualty figures and claimed to have shot down an army helicopter - something denied by Kiev.

President-elect Petro Poroshenko ordered the resumption of operations by government forces to quell the rebellion by pro-Russian militia in the Russian-speaking east soon after scoring a resounding victory in an election on May 25.

The pro-Western Poroshenko said on Wednesday in Warsaw where he met U.S. President Barack Obama that he would unveil a plan for a "peaceful resolution" of the situation in the east after his inauguration next Saturday.

The Kiev government says the fighting is being stirred up by Moscow, which opposes its pro-Western course. Kiev also accuses Russia of letting volunteer fighters cross into Ukraine to fight alongside the rebels.

Moscow denies this and renewed calls on Wednesday for Ukraine to end military operations and open dialogue with the separatists.