KIEV, Sept. 2 - Two civilians were killed Wednesday in eastern Ukraine, undermining fresh efforts to end simmering violence as the European Union agreed to extend sanctions against individuals deemed responsible for the conflict, AFP reported.

A Western-brokered ceasefire agreed in February has been punctuated by frequent deadly incidents.

In a fresh bid to restore peace, Ukrainian government and representatives of pro-Russian separatists last week agreed to seek to end ceasefire violations from Tuesday as children began school term.

But after several days of a relative lull in the war-ravaged industrial east, a group of civilians and law enforcement officials were caught in an ambush in the rebel-controlled Luhansk region during an anti-smuggling operation.

Two civilians were killed and four soldiers wounded, said military spokesman Andriy Lysenko.

In July, Ukraine set up groups of law enforcement officers, tax officials and volunteers to combat smuggling of contraband goods across the demarcation line in eastern Ukraine.

The two victims on Wednesday were the first participants in such a group to be killed.

An aide to President Petro Poroshenko, Yuri Biryukov, said that a member of the security service and several paratroopers were also wounded as a result of the attack.

Observers warn that gangs of smugglers are seeking to take advantage of the conflict that has claimed more than 6,800 lives since April last year.

The attack came as the 28-nation European Union agreed to extend sanctions for another six months against Ukrainian and Russian figures accused of backing pro-Moscow rebels.

"There is a political agreement; (officials) agreed to extend the sanctions for six months to March next year," one source told AFP after a meeting in Brussels of diplomats from EU nations.

EU member states are expected to formally endorse the decision ahead of the scheduled expiry of the sanctions on September 15.

The Organization for Security and Cooperation in Europe, which monitors the ceasefire, said the fighting had subsided significantly but the line of contact remained tense.

"The sides are able to control the fire at the contact line," said Alexander Hug, deputy chief monitor of the OSCE Special Monitoring Mission to Ukraine.

"However, one should not forget that the guns, the weapons are still at the contact line."

Kiev and the West accuse Russia of backing the rebels with weapons and troops, a claim the Kremlin denies. (afp/ez)