Another reason why it just can't be an atomic nuke: Nuclear radiation levels are monitored all over Europe, just think of Tschernobyl. A nuke (even from a small bomb) will sooner or later appear on these stations, and even the seperatists wont risk that. Putin would be forced to give up his support because of international pressure and this would be the end of them.
As MadMax pointed out, it seems to be more like a big uncontrolled explosion from an ammunition depository or something alike and I think the fog/weather tricks the eye in regard to size and shape of the blast (Fire and its glow can be seen really far at night compared to daylight).