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A pro-Russian separatist records a building damaged by recent shelling in Kuibyshevski district in Donetsk, eastern Ukraine, November 25, 2014. REUTERS

DONETSK, Ukraine -- For hours, small crowds in Donetsk huddle hopefully in the cold around cash machines that never get filled, as artillery rumbles in the distance.

Money is running short in the rebel heartland since the government announced this month that it will suspend banking services as it piles on the pressure. Almost all ATMs have stopped working and the remainder are expected to stop operating over the next two weeks.

The move is part of Ukraine's plan to suffocate its separatist foe, now that its costly military campaign has foundered. Authorities say they are also withdrawing all state services from rebel areas, although hospital and school workers in the rebel stronghold of Donetsk say it has been a while since they last saw funding anyhow.

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Ukrainian President Petro Poroshenko speaks to a joint session of Congress, urging the U.S. and other nations to help his country fend off Russia...

Yet if the government of President Petro Poroshenko hopes to turn people in eastern Ukraine against separatist leadership, the evidence on the ground suggests the strategy may only be hardening their resolve.

"What Poroshenko is saying to us is: 'You are no longer Ukrainians. You won't get pensions, you won't get social payments, When you croak, then we'll stop this war against you,'" said Donetsk retiree Georgy Sharov. "But I don't want to go to Ukraine and beg for their mercy."

The cash lines have typically formed in front of cash machines belonging to state savings bank Oshcadbank, which handles pensions and social support payments.

"Even they don't always have money," said Donetsk resident Sergei Smotovsky, standing outside a branch of the bank. "The worst thing is that not only can you not get social payments. You can't even withdraw money that you earned, your salary."

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Ukraine tries risky new tactic against rebels