An explosion at a cafe has killed Alexander Zakharchenko, the leader of the Russian-backed separatists in Donetsk, eastern Ukraine, sources in the rebel administration there say.

The report was carried by the rebel “Donetsk Republic” news agency DNR.

Some Ukrainians suspected over the blast were arrested nearby, a rebel security source was quoted as saying.

The heavily-armed rebels in Donetsk and Luhansk regions refuse to recognise the Ukrainian government in Kiev.

The rebel and Russian news reports say the separatist “finance minister” Alexander Timofeyev was wounded in the blast at the Separ cafe.

“According to preliminary information, it is unfortunately true. The republic’s leader suffered a fatal wound,” a senior Donetsk rebel, Vladislav Berdichevsky, told Interfax news agency.

Moscow denies sending regular troops and heavy weapons to the separatists, but admits that Russian “volunteers” are helping the rebels.

The rebels seized large swathes of territory in the Donetsk and Luhansk regions in an uprising in April 2014.

The frontline between them and Ukrainian government troops has remained largely static for months, but skirmishes continue despite a fragile ceasefire deal.