The other alternative is for Russia to reinsert occupied Donbass into Ukraine with huge costs for its redevelopment, especially since the rebel leadership appropriated large amounts of real estate and businesses.
This rebels position could be empowered by a win in elections planned for the occupied territories of LPR and DPR on 20 February 2016.
Rebel leader of Luhansk Igor Plotnitsky has said:No one from us want to return to Ukraine and as I understand it, Ukraine doesnt want us either.
But Plotnitsky has indicated there is room for compromise, meaning Kyiv may need to grant an amnesty to rebels accused of war crimes and a special status for the LPR and DPR. It would also give Ukraine control over its borders.
Such a move could legitimise their institutions and provide semi-independence from Kyiv, but is a possible solution to secure the borders and a create a lasting peace. We are in a divorce in a three-room apartment, said Plotnitsky.Russia from one side, Ukraine from the other and us in the middle.
Head of DPR Security Alexander Khodakovsky also supports reintegration, but under terms favourable to the Republics - andhas said in September he was not satisfied with what Kyiv had to offer.
Ongoing negotiations involve the Minsk Contact Group, including representatives of Ukraine, Russia, the Organization for Security and Cooperation in Europe (OSCE), alongside the DPR and LPR. This works in tandem with the Normandy Format of German, Russian, Ukrainian and French leaders, who are encouraging a resolution.
But on the street in Donetsk, most residents are sceptical about the effectiveness of the talks in Minsk.
I consider all peace negotiations finished when the world leaders appear and say: Gentlemen, the war has ended, no one else will shoot!, says Oleg, a student. Because when they start to talk about something in Minsk, the gunfire begins in Donetsk.
Despite the promise of an armistice, many still see violence as part of daily life. It is likely that the withdrawal of arms after the some agreements is happening, but in the Kiev District of Donetsk city, there is still shooting every night, says a manager, Marina.
There is a demand for more practical solutions. We are tired and want it to finish soon, says Marina. It is necessary to prepare for winter, not to engage in conversation. It is not clear whether we have gas, water or electricity. This is what worries me - not the next negotiations, which one are we talking about now? The fifteenth?
France and Germany are pushing for a compromise where Ukraine retains the Donbass region. But with a deal in place, Russia gifts Ukraine a collapsed infrastructure, a gangster ruling class, a broken economy and a traumatised population, almost half of which are scattered across the rest of the country, Russia and Belorussia.
The Russians will give Ukraine a poisoned chalice, says Anders Aslund. The idea is to make sure that Ukraine fails. This suits Moscow very well - the worse the better.
The view that the Donbass is no more than an instrument to undermine Ukraine is echoed by Donetsk Governor Pavlo Zhebrivsky.
A democratically successful Ukraine would mean the death of imperial Russia and Putin's political death, he says. Putin is not ready to leave Ukraine alone. I have a pessimistic attitude to the negotiations. Without the tightening of sanctions against Russia and without the economic collapse of Russia, to say that that peace will come to Ukraine and Donbass means to deceive oneself.
Zhebrivsky believes Putin is not ready for a situation where borders between Ukraine and Russia overlap in the Donetsk region. Putin wants to do to us something worse than he did to Transnistria, he says.
The Governor talks in his office in Kramatorsk, 70 km from the makeshift border.
The shelling became more frequent last night - 15 attacks, before last night - 18 attacks, he says. The rebels are accumulating forces near the town of Novoazovsk, near Mariupol [a port in Ukraine]. Therefore, peace is very far from here.
Donbass may become the region nobody wants, but Ukraine needs to preserve its territorial integrity, becoming de jure a Ukrainian province, but de facto a Russian-backed micro-state.
Pragmatically, in three years Ukraine could easily live without that territory, says businessman Vitaliy Kropachov. But it is ours and nobody can guarantee that once we let it go, other scenarios like this will not take place in other regions. Federalization cannot even be considered. We are a united country.