Ukraine and pro-Russian rebels agreed a ceasefire on Friday, the first step towards ending a conflict in eastern Ukraine that has caused the worst standoff between Moscow and the West since the Cold War ended.

The deal, taking effect from 1500 GMT(11.00 a.m. EDT), was agreed at peace talks with representatives of Russia and the OSCE security and rights group in the Belarussian capital Minsk.

"The entire world longs for peace, the whole of Ukraine longs for peace, including millions of residents of (rebel-held) Donbass," Ukrainian President Petro Poroshenko said in a written statement.

"Human life is the highest value. We must do everything possible and impossible to end the bloodshed and put an end to people's suffering," he said, adding that he had ordered his armed forces to cease hostilities at 6 p.m. (1500 GMT).

Sergei Taruta, the pro-Kiev governor of the Donetsk region at the heart of the rebellion, told Reuters he was hopeful the deal would hold, but a senior rebel leader said the separatists still wanted a formal split from Ukraine.

"The ceasefire does not mean the end of (our) policy to split (from Ukraine)," Igor Plotnitsky, a leader of the Luhansk region, told reporters.

The terms of the deal were not immediately known but the sides indicated this week that a humanitarian corridor would be created for refugees and aid, a prisoner exchange would take place, and rebuilding work would begin in conflict areas.

In a sudden breakthrough this week, Russian President Vladimir Putin said he and Poroshenko had broadly agreed on steps towards a resolution of the conflict, and he set out a seven-point proposal end to end the five-month-old conflict.

Fighting continued even after the talks began, with mortar and artillery fire echoing on the edge of Donetsk, the rebels' main stronghold in eastern Ukraine, and clashes around the southeastern port city of Mariupol.

The rebels told Reuters some of their forces had entered Mariupol but a military spokesman in Kiev said Ukrainian forces were still in control of the city, a gateway to Ukrainian territories further south.

PUTIN, POROSHENKO BACK PEACE MOVES

Fighting began in largely Russian-speaking eastern Ukraine in mid-April, shortly after Russia annexed the Crimean peninsula following the removal of a Ukrainian president sympathetic to Moscow and Kiev shifted policy towards the European Union.

A ceasefire in June lasted 10 days but officials in Kiev hoped the new accord would bring a more lasting peace because it had the backing of Putin and Poroshenko.

NATO leaders have voiced deep caution about talk of a ceasefire, especially because of the timing, as NATO holds a summit in Wales and EU leaders consider more economic sanctions on Moscow over the crisis.

They say previous statements on securing peace have proved to be "smokescreens for continued detribalization of Ukraine".

By pushing for a ceasefire this week, Poroshenko changed his position after the tide turned in the conflict and Ukrainian troops were beaten back by a resurgent rebel force which the West says has received military support from Russia.

Moscow denies arming the rebels or sending in Russian troops, but Poroshenko appears worried he cannot now defeat the rebels and needs time to tackle a growing economic crisis and prepare for a parliamentary election.

Putin for the first time this week put his name to a concrete peace plan, proposing seven steps which would leave rebels in control of territory that accounts for about one tenth of Ukraine's population and an even larger share of its industry. It would also require Ukraine to remain unaligned.

Although the Kremlin leader may not have secured all his goals, he had reason to secure a settlement because of the growing impact of sanctions on Russia's stuttering economy.

Public support for Putin is high because of the seizure of Crimea, a Russian territory until Soviet leader Nikita Khrushchev gave it to Ukraine 70 years ago, but this could change if the conflict drags on and many Russians are killed.

Putin's key goals appear now to be to ensure Ukraine, a country of more than 40 million where Moscow has long had major influence, does not join NATO and that the eastern regions of Ukraine win much more autonomy.

Although Poroshenko still calls for Crimea to be part of Ukraine, there is little chance of Russia giving it up. Moscow can also hope to maintain influence in eastern Ukraine if a peace deal seals the rebels' territorial gains, creating a "frozen conflict" that ensures Ukraine is hard to govern.

Indicating his readiness for a deal, Putin said last week Poroshenko was a man he could "do business with", a suggestion he has decided that having Poroshenko in power is preferable to others in Kiev whom Moscow describe as the "party of war".

The ceasefire is expected to be monitored by observers from the Organization for Security and Cooperation in Europe.

(Additional reporting by Gareth Jones and Pavel Polityuk in Kiev, Aleksandar Vasovic in Mariupol, Elizabeth Piper, Alexei Anishchuk Lidia Kelly, Jazson Bush, Alissa de Carbonnel and Katya Golubkova in Moscow and Gabriela Baczynska in Donetsk; writing by Timothy Heritage; editing by Giles Elgood)