Ukraine's military has acknowledged that Russia-backed separatists have overrun another town in their onslaught against government troops in the east of the country.

Military spokesman Vladislav Seleznyov said the separatist forces, backed by tanks, attacked the town of Vuhlehirsk on Thursday and government troops were fighting to push them out.

The loss of the town would make it even more difficult for the government to hold onto Debaltseve, a nearby railway hub that sits between the two main rebel-held cities of Donetsk and Luhansk.

Debaltseve has been the scene of some of the fiercest fighting since the rebel offensive began this month after weeks of relative quiet.

Seleznyov said the rebels fired Grad multiple rocket launchers at the railway station overnight.