* Separatists say Ukraine used cluster bombs
* Kiev says separatists accidentally shot rebel-held building
By Thomas Grove
LUHANSK, Ukraine, June 3 (Reuters) - Stepping over shrapnel strewn across a leafy park in the eastern Ukrainian city of Luhansk, pro-Russian rebel leader Vasily Nikitin gives his version of what happened in the few seconds of violence that killed eight people in broad daylight.
He says the sharp, twisted pieces of metal he and others collected from the grass, off the street, from behind the tires of a blood-smeared white Nissan Maxima is proof the Ukrainian army shot unguided S-8KO cluster bombs into the park and a nearby rebel headquarters, causing an explosion.
In the worst violence yet in Ukraine's eastern Luhansk province, which included a shootout between rebels and border guards, Kiev said rebels caused the blast when they launched a heat-seeking rocket at a Ukrainian plane that instead zeroed in on the occupied regional administration building.
In the remoter parts of eastern Ukraine and under the fog of war, truth often takes collateral damage.
The violence has caused Moscow to step up its rhetoric against Kiev only days ahead of a planned meeting between Ukraine's president-elect Petro Poroshenko and U.S. President Barack Obama and other western leaders this week.
Stepping over the nearly 20 pock marks in the park grounds, sidewalk and nearby street, Nikitin, who carries the title of prime minister of the self-proclaimed Luhansk People's Republic, points down at the debris-strewn ground.
"The shooting started here in the centre of the park and continued the whole way to the administration building. The shrapnel simply cut through everything and everyone here," he said, wearing a black bullet-proof vest.
Since the beginning of the armed conflict, Luhansk has remained in the shadow of its richer neighbour Donetsk, the birthplace of the country's richest son Rinat Akhmetov and of former president Viktor Yanukovich, whose leanings towards Russia prompted street protests that toppled him and laid bare Ukraine's East-West divide.
Luhansk, a much poorer region that represents the most porous area of Ukraine's nearly 2,000-kilometre-long border with Russia, is important for its very remoteness, which leaves it vulnerable to misinformation from either side.
By mid-day, ballistics experts from Luhansk's rebel-friendly regional police had analysed the shrapnel, which they said had come from Soviet-era S-8KO cluster bombs.
They said the markings they found allowed them to trace the date of their manufacture back to 1986.
Shrapnel was not available for independent examination by the time police said they had identified the armaments.
"The bombs are made to pierce armour. You shoot them over armoured vehicles or tanks to cut through the metal, up to 35 millimetres," said a ballistics expert Nikolai, 32.
One of the deputy head doctors of the Luhansk Provincial hospital Sergei Babenko said eight to 10 people came to his hospital on Monday with shrapnel wounds.
Rebels said eight civilians died in the violence.
Further away from the city centre, residents of the neighbourhood of Mirny, or 'Peaceful', also emerged from their homes after nearly 16 hours of gunfire between separatists and officers at a border guard office nearby.
The rebels, who had broken into several of the 10-storey apartment blocs around the border guards' base, had taken position on the roofs, hurling grenades and keeping a steady torrent of machine gun fire on the border guards.
In the fields beyond the base, neighbours were waiting for a car to take away the body of a man who had been caught unexpectedly and killed in the shootout.
A mother of one of the border guards, Zoya, stood outside the base's gates, which were battered by automatic rifle fire, looking to catch a glimpse of her son, who was still inside, along with around 100-150 others, she said.
In a series of phone conversations, she said her 27-year old son had described a "hellish" bombardment of fire from the roofs above and had refused to shoot back.
"The first hours were the worse, and then he said he got used to it. Now, all the officers have been taken to different rooms on the base. No one knows where anyone is, and the commander says they won't give up," said Zoya, 54, standing among empty bullet casings.
Rebels say five of their own died in the shootout, though the border guards have not yet made a statement on their losses.
One of her neighbours, Zhanna, who lives in the top floor of one of the buildings said she wanted to leave her home at least until the fighting was over but had nowhere to go.
"All I heard all day yesterday was the shooting and the rebels congratulating themselves on hitting targets," she said. (Reporting by Thomas Grove; Editing by Will Waterman)
Our Standards: The Thomson Reuters Trust Principles.