Pro-Russian rebels have said they would be prepared to stay part of Ukraine if they were granted "special status," Russian news agencies report.
In a statement the separatists said one of their key conditions would be for Kiev to immediately end its military offensive.
Ceasefire talks were going ahead today but no major decision was expected.
Andrei Purgin, one of the leaders of the self-proclaimed Donetsk People's Republic, said: "This is the beginning of the process. We have come with proposals to find common ground and end the war and people dying."
Were the Russians -as Barack Obama claims - weighed down by sanctions, or where the Ukrainians looking to cut their losses?
The new president of the European Council could be "very important" for David Cameron.