Ukraine rebel leaders sworn in

Members of an honour guard wait for the arrival of separatist leader Alexander Zakharchenko in front of a theatre in Donetsk, eastern Ukraine. Photo by Reuters

Warning of the threat of new offensive by Moscow-backed rebels, Ukraine's leader said newly-formed army units would be sent to defend a string of eastern cities.

NATO's highest ranking officer, a U.S. general, said conditions were now in place to create a "frozen conflict", a term the West uses to describe rebel regions carved out of other ex-Soviet states that Moscow protects with its troops.

The inauguration ceremonies in east Ukraine took place even as tens of thousands of people marched in Moscow for "Unity Day", a nationalist holiday celebrating a 17th century battle, revived under President Vladimir Putin to replace the Soviet-era celebration of the Bolshevik revolution. Ukraine featured heavily in speeches for the occasion.

Most fighting has halted in the war in eastern Ukraine since September, when Kiev agreed to a truce after its forces were pushed back by what it and Western countries say was an incursion by armoured columns of Russian troops.

But the frontline remains dangerous and tense, with both sides complaining of shooting nearly every day. Artillery from the direction of the wreckage of Donetsk's international airport, still under government control, thudded during the rebel leader's inauguration in the city.

Moscow says the election of Alexander Zakharchenko and Igor Plotnitsky as leaders of the Donetsk and Luhansk "people's republics", which jointly call themselves "new Russia", means that Kiev should now negotiate with them directly.

Kiev has always rejected this, describing the rebels as Russian-backed "terrorists" or "bandits", with no legitimacy.

The worry for the West is that Moscow, which has already annexed Ukraine's Crimea peninsula, will now also exert control over eastern Ukraine's industrial Donbass region in perpetuity, as it has done for two decades in parts of Moldova and Georgia that broke away when the Soviet Union collapsed.

"I'm concerned that the conditions are there that could create  a frozen conflict," said U.S. Air Force General Philip Breedlove, the highest-ranking NATO officer, said in Washington.

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Ukraine rebel leaders sworn in