© RIA Novosti / Valeriy MelnikovPeople in Lugansk after an artillery attack on July 18, 2014.
According to the report, the observers met with members of Lugansk emergency first aid brigade on Thursday.
"The doctors said that in June and July alone there were 250 killed and 850 wounded in the Lugansk region," the document published Saturday said.
The figures didn't include civilians killed in close vicinity of combat zones outside the city as well as causalities among those involved in fighting, the report pointed.
The medics also told the Special Monitoring Mission (SMM) that "increasingly more people were being killed by booby traps and mines."
The situation in Lugansk and Donetsk Regions "remained tense with on-going fighting around the city of Luhansk," the observers said.
The report says the "SMM heard the sound of a shell hitting a garage," while patrolling the center of Lugansk.
When the mission arrived on the scene, they found "one man killed lying on the pavement; the garage and a car were totally demolished."
On Saturday night, air sirens started off in Lugansk as a fighter jet was spotted in the skies following a brief mortar shelling. Friday attacks took 15 lives while over 50 more were injured, local authorities said.
WARNING: Graphic video shows victims of the shelling in Lugansk
As the situation in the country's east continues to deteriorate, Ukrainian President Petro Poroshenko refused to include south-eastern militia in the peace negotiations, which are aimed at resolving the conflict in the country.
Poroshenko, who met with Dutch foreign minister Frans Timmermans in Kiev on Saturday, blamed the self-defense forces for bringing down the Malaysia airline's plane, which resulted in 298 deaths two days ago.
"Speaking about the settlement of the conflict in the Donbas, Poroshenko noted that those who are related to a terrorist attack cannot be a party in the negotiations. Their crime should be investigated in international courts," the Ukrainian president's press service said.
Comment: Someone please remind Poro-psycho about a little thing called presumption of innocence.
Poroshenko also announced that Kiev is preparing international legal claims in order for the People's Republic of Donetsk and Lugansk to be globally recognized as terrorist organizations.
The crackdown on the south-east started in mid-April, after people in the Donetsk and Lugansk regions refused to recognize the coup-imposed authorities in Kiev and demanded federalization.
The Ukrainian military and National Guard resorted to airstrikes and shelling in their struggle against the self-defense forces in Donetsk and Lugansk.
The operation stalled for some time, but then Kiev achieved major military gains by taking control of important militia strongholds - the cities of Slavyansk and Kramatorsk - in early July.
Government forces are now using all its arsenal to crush rebel resistance in the regional capitals of Donetsk and Lugansk.
On July 10, Ukraine's deputy health minister spoke of 478 civilians being killed in the conflict, with nearly 1,400 people receiving injuries.
Disregard of the population by Kiev troops saw the number of Ukrainian refugees fleeing to Russia reaching 110,000 people, while 54,400 others were displaced within Ukraine, according to stats from the UN High Commissioner for Refugees (UNHCR).
A report by the UN Office for the Coordination of Humanitarian Affairs says over 4.5 million civilians remain in the war zone in Ukraine.
© RIA Novosti / Mikhail VoskresenskiyA local resident in a house destroyed in the Ukrainian army's artillery attack on Lugansk on July 16, 2014.
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