“We will advance and free our land,” Petro Poroshenko, Ukraine’s new pro-western president, said in a statement made public after midnight.
Mr Poroshenko referred to days of failed negotiations with the separatists and Russia’s president, in which Kiev and EU leaders pressed Vladimir Putin to stop the alleged flow of arms and rebels from its territory to separatists in eastern Ukraine.
But without directly naming Russia or Mr Putin, he said: “During 10 days [of ceasefire] we demonstrated to the Donbass region, Ukraine and the entire world our dedication to a peaceful settlement of this conflict provoked from abroad.”
He added: “Unfortunately, the unique chance to implement the peace plan was not realised. This happened due to the criminal actions of militants. They publicly declared their desire to support the peace plan and ceasefire. But they more than 100 times barefacedly violated the ceasefire regime.”
Promising amnesty for militants not guilty of capital crimes who lay down their arms and more governing authority for regional government, Mr Poroshenko called for the support and understanding of citizens in the restive region, pledging that order and economic prosperity would be restored.
But as reports emerged that fierce overnight battles were already under way in separatists strongholds and concern mounted about Russia’s reaction to Ukraine’s actions, Mr Poroshenko conceded that “the road to peace has proved more difficult than wanted”.
“I do not want to ornate reality. It will not be easy or straightforward,” he added.
The dramatic developments come hours after Moscow on Monday night invited Ukrainian border guards and international observers to oversee the Russian side of the border with Ukraine, an 11th-hour move to push Kiev to extend a ceasefire and to deter the EU from imposing wider economic sanctions.
EU leaders on Friday warned Moscow that sanctions would be broadened unless it used its influence over pro-Russian separatist to de-escalate the conflict in Ukraine and stopped the flow of weapons and fighters across the border to the breakaway regions of Donetsk and Luhansk.
They set a deadline of June 30 for taking specified steps, including the return of three border posts to Ukrainian government control, implementation of a ceasefire and a paving of the way for longer-term peace talks.
Moscow made its concession after Mr Putin discussed the crisis by telephone with Germany’s Chancellor Angela Merkel and President François Hollande of France and Mr Poroshenko.
“President Vladimir Putin has proposed that Ukrainian border guards be granted access to those crossing points from the Russian side as observers for joint control of the border, and that observers from the [Organisation for Security and Co-operation in Europe] also be admitted to those crossing points from the Russian side,” said Russian foreign minister Sergei Lavrov.
“We hope that this initiative of the Russian president will allow all responsible parties to take a decision to extend the ceasefire, to extend the truce,” Mr Lavrov said.
Ambassadors in Brussels are expected to assess on Tuesday morning whether EU demands have been met.
There would probably have to be an emergency meeting of foreign ministers, and possibly heads of state, before the bloc imposed additional sanctions that target entire sectors of the Russian economy rather than individuals.
The ceasefire first declared by Mr Poroshenko on June 20 and extended by 72 hours on Friday expired on Monday at 7pm GMT.
The Ukrainian president is coming under increasing domestic pressure to crush the pro-Russian rebellion amid continued attacks by separatists.
Pro-Russian militants on Monday continued attacking military and security force positions in eastern Ukraine, killing one soldier, military spokesperson Oleksiy Dmitrashkovsky said on local television.
At least 25 Ukrainian military personnel have been killed in clashes since Kiev declared a ceasefire.
Russia’s concession meets the EU’s first demand for an “agreement on a verification mechanism, monitored by the Organisation for Security and Co-operation in Europe, for the ceasefire and for the effective control of the border”.
Although repeatedly discussed and agreed in principle by the leaders of Ukraine, Russia, Germany and France as a way of halting the flow of arms and fighters, there had been little progress.
The EU had also demanded a return to the Ukrainian authorities of the three border checkpoints: Izvarino, Dolzhanskiy and Krasnopartizansk, which pro-Russian militants had refused to surrender, arguing that theirs was now a sovereign state.