By Alissa de Carbonnel DONETSK Ukraine (Reuters) - Fighting raged in eastern Ukraine for the second straight day on Tuesday as the army rolled out an offensive against pro-Russia separatists holding the city of Slaviansk, with dead and wounded on both sides. Rebels in the town, a strategically located and fiercely separatist stronghold where a military helicopter was shot down last week killing 14 servicemen, said they had brought down an Su-25 attack aircraft and a helicopter. Ukrainian authorities denied the report. Twelve hours after Kiev's forces launched an overnight military operation in and around Slaviansk, Vladyslav Seleznyov, a spokesman for the Ukrainians, said: "Today we have had two killed and 42 wounded." He put the number of dead and wounded on the separatist side at about 300, a figure that could not be independently verified. "Fighting is continuing", he told Reuters on Tuesday evening. A spokeswoman for the rebels, Stella Khorosheva, said the death toll in the town "was rising continuously." She could not say how many casualties there were but said Ukrainian forces had carried out air strikes on villages skirting the town. As the fighting got worse, many women and children fled the town in recent days. One woman described how artillery fire began at dawn. "I didn't know what that was before, but I do now. We counted the number of fires and impacts," Daria, 27, a resident who said she was trying to leave with her daughter, said by telephone. "War planes were flying overhead ... We stayed in the basement as much as we could." President-elect Petro Poroshenko, who scored a resounding victory in the May 25 election, called for a resumption of military operations by government forces to quell rebellions by pro-Russian militia across the Russian-speaking east. The Kiev government says the fighting is fomented 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 is urging Ukraine to end military operations and open dialogue with the separatists. LOSS OF LIFE Ukraine announced on Tuesday that 181 people, including 59 servicemen, had been killed "by terrorist activity" since hostilities broke out in April. Since government forces resumed their push against the rebels, there have been clashes in and around the main industrial hub of Donetsk and near the border town of Luhansk, with loss of life on both sides. But it is unclear whether the Ukrainian military, backed up by attack aircraft, is making real progress against the rebels, who are occupying strategic points in densely populated cities. With violence continuing in Ukraine's east and tension high between Ukraine and Russia, the crisis is certain to dominate diplomatic exchanges when the newly elected Poroshenko meets world leaders this week ahead of his inauguration next Saturday. He is expected to meet U.S. President Barack Obama and European leaders in Warsaw on Wednesday and both he and Russia's Vladimir Putin will attend World War Two D-day celebrations in France on Friday, although no formal talks are planned. The fighting in Slaviansk followed a daylong firefight on Monday in Luhansk, a town further to the east on the Russian border, after an attack by separatists on a border guard camp. At least two people were killed in the city center of Luhansk, which like Slaviansk is under separatist control. Rebels said the blast was caused by a Ukrainian air strike but Ukrainians said it was a heat-seeking missile that misfired after it was launched by the rebels. "At the present time the active phase of the 'anti-terrorist operation' is going on near Slaviansk. The (separatist) fighters are being blocked. If they refuse to lay down their arms they will be destroyed," said Seleznyov, a spokesman for the military operation. "Our job is to establish peace in the region and this we will do." Fleeing the fighting in Slaviansk, Anya Kholodnaya and her three children were among some 40 other women and children who found refuge in a dormitory in Ilovaisk, a village near the regional capital of Donetsk. "We left without knowing where we were going, without money. When we were sitting in the basement, shaking because of the shelling, that's when I decided to leave," said the 34-year-old kindergarten teacher, unbundling blankets, toys and clothes gifted by local residents as her brood settled into a crowded run-down dormitory room. The women's mood has hardened against the government in Kiev. "I don't want any part of this government, of a president who calls us all terrorists," said Anya Savchenko, 37, who left the besieged town with her 9-month-old baby. (Additional reporting by Pavel Polityuk; Writing By Richard Balmforth; Editing by Anna Willard,; Giles Elgood and Gunna Dickson)
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