Ukrainian and pro-Russian rebel leaders tried on Friday to revive peace talks that stalled after a first round of negotiations on Wednesday but agreed to exchange hundreds of prisoners in a goodwill gesture.

The deal would see 125 Ukrainian servicemen swapped for 225 rebels held by Kiev, Ukraine security services told Reuters.

A Belarussian official earlier in the day said that the two sides would not be meeting in Minsk as planned on Friday. "There will be no contact group meeting today," foreign ministry spokesman Dmitry Mironchik told AFP by telephone.

Representatives of Ukraine, Russia, pro-Russia rebels and the Organization for Security and Cooperation in Europe (OSCE) arrived in the capital of Belarus in the early evening on Wednesday and negotiations broke up after more than five hours, with pro-Russian rebels reporting little to no progress.

The plan was for both sides to gather again on Friday to sign a comprehensive agreement reinforcing a September 5 truce deal and agreeing to a withdrawal of heavy weaponry from disputed territory.

The negotiations are focusing on measures intended to ensure a lasting ceasefire in eastern Ukraine, where fighting between pro-Russia separatists and the Ukrainian government forces has claimed more than 4,700 lives, 1,300 of which followed the September truce.

Despite rounds of peace talks in September producing a tentative ceasefire, both sides have failed to agree on a line of division and heavy fighting has continued.

“More than a thousand people have been killed since a ceasefire was signed on September 5,” said FRANCE 24’s international affairs editor, Douglas Herbert, though adding that hostilities had abated this month amid renewed peace efforts.

Heidi Tagliavini, the OSCE's lead figure since the talks began, has said a pullback of heavy weaponry, an exchange of all war prisoners and the delivery of humanitarian aid would top the agenda for the Minsk talks.

Denis Pushilin, one of the separatist leaders, was quoted by the Interfax news agency as saying the parties had reached a preliminary agreement on the prisoners' exchange and are now trying to finalize details. He said the rebels would also demand that Ukraine approve a law granting broad rights to the region.

Money at stake

Ukrainian President Petro Poroshenko initiated such a law earlier in the autumn, but retracted it after separatists staged local elections in November without the government's approval. Ukraine and the West denounced that as illegal and destabilizing. Ukraine also has cut pensions and other financial services to the rebel areas.

“Throughout these regions you have long queues of pensioners lining up to get their cash payments,” said FRANCE 24’s Herbert, adding that many bank machines had been reported empty. Herbert said neighbouring Russia could ill-afford to step up its alleged support of the separatist regions as it copes with “its own tailspin and economic crisis”.

The insurgency in the Donetsk and the Luhansk regions of eastern Ukraine erupted in April following Moscow's annexation of Ukraine's Crimean Peninsula. Ukraine and the West have accused Russia of fuelling the rebellion with troops and weapons, accusations Moscow has denied. Europe and the US have imposed sanctions on Russia.

(FRANCE 24 with AP )