At least five people, including two children and three government soldiers, were killed in fighting in eastern Ukraine near the rebel-held town of Donetsk late Friday, Agence France-Presse, or AFP, reported Saturday, citing Ukrainian government officials. The incident comes just days after NATO alleged that Russian tanks and troops had been observed entering the strife-torn regions in eastern Ukraine, triggering fears that the conflict could escalate into a full-blown war.

At least 12 people were also injured when artillery struck a residential area in the city of Horlivka, about 19 miles north of Donetsk, AFP reported, citing local officials in the rebel-held city. The officials, however, did not specify who fired the mortars.

The incident is latest in a series of violent clashes that have erupted through the week between Ukrainian forces and pro-Russian rebels, as a two-month-old ceasefire between the two crumbles. According to the United Nations, over 4,000 people have died in eastern Ukraine in the last seven months of fighting.

Meanwhile, world leaders gathered in Brisbane for the G20 summit threatened to impose further sanctions on Russia if it did not end its “aggression” in Ukraine, according to media reports.

U.S. President Barack Obama reportedly said on Saturday that Russia’s actions in Ukraine were a “threat to the world,” echoing similar statements by British Prime Minister David Cameron and European Council president Herman Van Rompuy, who called on Moscow to stop the flow of weapons and troops into Ukraine.

Russia has so far denied involvement in the conflict in eastern Ukraine and has also criticized economic sanctions imposed on it by the U.S. and the European Union, according to media reports.