Ukraine on Wednesday announced it will halt government funding to those areas of its eastern regions controlled by Russian-backed separatists.
Prime Minister Arseniy Yatsenyuk said Wednesday the cutoff of funding to parts of the Donetsk and Luhansk regions will continue as long as they are held by "terrorists."
Yatsenyuk, who made his comments during a cabinet meeting, said the government would continue to supply gas and electricity to the areas.
The self-declared breakaway regions on Sunday defied Ukraine by holding elections meant to assert their autonomy from Kyiv.
So far Russia is the only government to recognize the elections, which were slammed by the U.S., U.N. and others as unhelpful and illegitimate.
A two-month-old cease-fire is barely holding up in the rebel-held area, with occasional clashes breaking out between Ukrainian soldiers and separatist forces.
Two teenagers were killed and three injured by shelling Wednesday while playing on a school sports field in rebel-controlled Donetsk, the city administration reported.
The spokesman for Ukraine's National Security and Defense Council, Andriy Lysenko, said two Ukrainian servicemen were killed and nine wounded over the preceding 24 hours.
Late Tuesday, President Petro Poroshenko ordered more troops deployed to key southern and eastern cities, to fend off any possible new pro-Russian rebel offensive.
A Poroshenko statement says the units will fortify the eastern cities of Mariupol, Berdyansk and Kharkiv against separatist incursions.
Ukraine security officials have reported a recent increase in cross-border Russian weapons transfers to rebels.
The president says he remains committed to most terms the September truce. But in the aftermath of Sunday's unsanctioned polls, he said he will ask parliament to repeal a law that gives special status to the rebel-held cities of Donetsk and Luhansk.
Sunday's polls in Ukraine's east came a week after voters in the rest of Ukraine voted overwhelmingly for a new parliament dominated by pro-Western lawmakers favoring closer ties with western Europe.
Moscow has denied any direct role in the Ukraine uprising, which has claimed more than 4,000 lives since rebels took up arms against the Kyiv government in April. The Kremlin has described Russian soldiers fighting alongside rebels in Ukraine's east as volunteers.
