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Ukrainian servicemen ride on military vehicles as they leave an area around Debaltseve, eastern Ukraine, on Feb. 18, 2015.GLEB GARANICH/Reuters

The Ukrainian army will only consider withdrawing its heavy weaponry from a designated buffer zone in the east of the country "when the shelling stops," the country's deputy defence minister said in an interview Wednesday, as the strategic town of Debaltseve fell into separatist hands.

There were signs that a ceasefire may indeed follow the humiliating defeat for the Ukrainian army, which had fought for weeks to hold onto the key transport hub despite being effectively surrounded by Russian-backed fighters. Columns of exhausted Ukraine troops and equipment were seen leaving Debaltseve on Wednesday, a day after the rebels claimed to have taken control of the centre of town and video evidence emerged of the pounding the Ukrainian forces had sustained while trying to defend it.

"This morning the Ukrainian armed forces together with the National Guard completed an operation for a planned and organized withdrawal from Debaltseve. As of now we can say that 80 per cent of our units have left," Ukrainian President Petro Poroshenko said in an audio message released by his press service. However, the retreat seemed more chaotic than organized, with some soldiers fleeing on foot, and others spotted hailing taxis to take them away from the front line.

Mr. Poroshenko, who was reportedly headed to the war zone for a special meeting with his security council, said two columns of troops remaining in Debaltseve were expected to also withdraw.

Following the capture of Debaltseve – which links the main rebel-held cities of Donetsk and Lugansk – Russia's Interfax news agency reported that the rebels had begun to withdraw their heavy artillery from other parts of the front line. Russian Foreign Minister Sergei Lavrov said, besides Debaltseve, a ceasefire deal signed in Minsk last week was now in effect around the rest of the conflict zone.

Immediately following the singing of the Minsk deal last week, Russian President Vladimir Putin told a press conference that he had warned Mr. Poroshenko during negotiations that some 8,000 Ukrainian troops were surrounded in Debaltseve and should lay down their arms before the ceasefire could begin. "Ukrainian authorities believe… that their troops are not encircled," Mr. Putin said at the time, sounding incredulous.

Under the Minsk agreement, which has been largely ignored so far, both sides were due to have begun withdrawing their artillery and rocket systems on Monday to create a 100-kilometre wide buffer zone. But the future of the pact fell into doubt as fighting continued in and around Debaltseve, which separatist leaders claimed fell on their side of the ceasefire line.

In an interview Wednesday with The Globe and Mail, Ukraine's deputy defence minister, Petro Mekhed, said that the Ukrainian forces were "regrouping" around Debaltseve and that the situation on the ground was constantly shifting.

Speaking just before the Interfax report was published, he said it was impossible to consider fulfilling the Minsk accords while the separatists were continuing to attack all along the front line. "How can we withdraw when we are being shelled more than 40 times a day, in all sectors?" he asked. "When the shelling stops, we will start the withdrawal of heavy weapons."

The 10-month old conflict, which began shortly after a pro-Western revolution in Kiev toppled a Moscow-backed government, has taken at least 5,500 lives so far. Some estimates put the figure at more than 7,000 dead.

Sitting in a boardroom inside the country's Defense Ministry headquarters in Kiev, Mr. Mekhed said the war in east Ukraine would not be over until the government regained control of a 400-kilometre stretch of the Russian border that is now under the control of the separatists. Ukraine claims that thousands of Russian troops, backed by advanced tanks and artillery, have crossed through that section of the border to bolster the rebel forces.

While the Kremlin heatedly denies the accusations, the United States, Canada and other NATO allies also accuse Moscow of fuelling the conflict in Donetsk and Lugansk. A report released Tuesday by Bellingcat, an open-source investigation site, found evidence that artillery had been fired from Russian territory into Ukraine in support of a rebel advance last summer.

Mr. Mekhed accused the separatist forces of recklessly shelling civilian areas, and denied accusations that the Ukrainian army had done the same, despite reports by human-rights organizations accusing both sides of ignoring international law in the conflict.

Even as he spoke, several dozen protesters – most of them women – gathered outside the Defence Ministry to demand the government do more to aid the outgunned soldiers still trapped in Debaltseve. Snezhana Arutyunyan, a 33-year-old hairdresser, said her brother was in Debaltseve, and that he had been furious and scared when she spoke to him on Tuesday.

"He said there were Chechens [fighting alongside the pro-Russian separatists] who were shooting everyone in the city and that [the Ukrainians] can't even shoot back because of the ceasefire."

Standing beside Ms. Arutyunyan was a grim-faced Inna Penya, a 25-year-old shopkeeper who said she was three months pregnant. Ms. Penya said her husband was in Debaltseve and she hadn't heard from him in almost a week.

In announcing the commencement ceasefire on Saturday, Mr. Poroshenko said Ukrainian forces would not be allowed to break use their weapons unless they had permission from his office. Mr. Mekhed, however, said that didn't apply to the soldiers surrounded in Debaltseve, who were allowed to defend themselves.

Mr. Poroshenko has repeatedly warned that he will be forced to introduce martial law if the Minsk ceasefire fails. Mr. Mekhed said that martial law was a "serious step" that would ban political activities and allow the army to commandeer factories and other property for the war effort. "It would mean we're repeating the 1930s and 40s when Hitler started to annex countries in Europe. Now Putin has annexed Crimea and he is trying to start a war in Europe," Mr. Mekhed said.

Mychailo Wynnyckyj, a Kiev-based political analyst, said the introduction of martial law was now "a very real possibility. The political pressure on Poroshenko to declare [it] is massive."