Authorities in Russian-controlled Donetsk accuse Ukraine of shelling the market.
Denis Pushilin, head of the Russian-installed authorities in Donetsk said the strike on the suburb of Tekstilshchik, had been fired by the Ukrainian military.
Pushilin said that the area had been hit by 155mm calibre and 152mm calibre artillery and that the shells had been fired from the direction of Kurakhove and Krasnohorivka to the west.
“These terrorist attacks by the Kyiv regime clearly demonstrate its lack of political will towards achieving peace and the settlement of this conflict by diplomatic means,” Russia’s Ministry of Foreign Affairs said in a statement.
There was no immediate comment from Ukraine.
Moscow-backed separatists have controlled the southeastern Ukrainian regions of Donetsk and Luhansk, known collectively as the Donbas, for almost 10 years.
But Russian President Vladimir Putin recognised them in 2022 and the annexation was condemned as illegal by most countries at the UN General Assembly.
Separately on Sunday, Russia’s Ministry of Defence said the country’s forces had taken control of the village of Krokhmalne in Ukraine’s northeastern Kharkiv region.
Volodymyr Fityo, spokesperson for Ukrainian Ground Forces Command, told reporters that Kyiv’s forces had withdrawn from the area.
Fityo said that Krokhmalne had a population of roughly 45 people before the start of Russia’s full-scale invasion in February 2022.
Reporting from Kyiv, Al Jazeea’s Rob McBride said Ukrainian authorities played down the significance of the withdrawal.
“They [Ukrainians] say this was a small village and they gave up only a couple of kilometres to the Russians…they say it was of little consequence for the overall situation,” Al Jazeera’s McBride said.
As Russia’s war in Ukraine nears its two-year mark, both Moscow and Kyiv’s forces have continued to fight from largely static positions along the roughly 1,500km (930-mile) front line throughout the winter.
Recent Russian attacks have also tried to find gaps in Ukraine’s defences by using large numbers of various types of missiles in an apparent effort to saturate air defence systems.