KIEV, July 7 - Pro-Russian rebels erected new barricades on the streets of Donetsk on Monday, preparing to make a stand in the city of a million people after losing their bastion in the town of Slovyansk in the worst defeat of their three-month uprising.

Occasional bursts of gunfire could be heard in the distance from the center of Donetsk, where residents said they were now living in fear of a potential battle between government forces and the separatist gunmen now out in force, Reuters reported.

Ukraine's richest man, Rinat Ahmetov, pleaded with the government on Monday not to bomb his home city. Local authorities say thousands of residents have left Donetsk, but most have nowhere to go.

The Kiev government has said it will act quickly to seize back more territory from the rebels after re-taking Slavyansk over the weekend in what President Petro Poroshenko called a turning point in the conflict.

Rebels retreating from Slovyansk, some driving armored vehicles flying Russian flags, drove 110 km (65 miles) south into Donetsk over the weekend.

About 1,000 of them held a bellicose rally in the central square on Sunday, and on Monday many were visible on the streets, having established checkpoints to check the documents of drivers.

Their presence drew a warning from Donetsk's local authorities. "There are men in camouflage and with weapons on the streets. We ask residents not to enter into arguments with these people and be extremely careful," said a message from the town municipality.

Although most shops and businesses were still open, some were shut, and residents spoke of their fear that government forces could soon attack.

"The atmosphere is very tense now. There is no prospect of a future. You go to sleep in alarm and wake up in alarm," said Konstantin, 28, a cook.

"The Kiev authorities promise to tighten a ring around Donetsk and meticulously clear it of fighters. I don't know what to believe in any more. Donetsk is bigger than Slovyansk, but it seems to me it won't end with one single ring. All the same I have the impression the fighters will yield their positions."

The rebels' commander, a Muscovite using the name Igor Strelkov, was quoted by Interfax news agency as saying his men would fight for the city, which was "much easier to defend than little Slovyansk ".

Strelkov's whereabouts were not immediately clear. Rebel sources said two other prominent local separatist leaders, Alexander Boroday and Denis Pushilin, were both in Russia.

The retreat from Slaviansk appears to have hurt the morale of the fighters, who have held sway in some eastern towns and cities since rising up in April.

One fighter from a group called the Vostok battalion, who declined to give his name, said: "It's a real mess. But we are being badly hit by artillery. We don't even see it coming."

Just outside Donetsk, a railway bridge running across the main road connecting the town to Slaviansk was blown up on Monday as a cargo train crossed it. It was not clear who had carried out the attack.

The city is the headquarters for Akhmetov, Ukraine's wealthiest man by far, whose fortune, founded on coal and steel, is put at more than $11 billion by Forbes. He said government forces should show restraint in the surrounding Donbass region.

"Donetsk must not be bombed. Donbass must not be bombed. Cities, towns and infrastructure must not be destroyed," he told Ukraina television. "We must avoid suffering and deaths of peaceful people."

The Defense Ministry said early on Monday separatists had launched 10 attacks on government posts and army positions in the previous 24 hours with mortars and small arms. It gave no details of the incidents or casualties, but said troops had returned fire: "The terrorists were given a fitting reply."

More than 200 Ukrainian troops have been killed as well as hundreds of civilians and rebels in the conflict. (rt/ez)