Ukraine's forces have withdrawn from the bombed-out city of Lysychansk, prompting Russia to claim full control of the eastern Luhansk region, a key Kremlin war goal, but President Volodymyr Zelenskiy vowed to regain the lost territory.
Ukraine on Sunday said the tactical withdrawal would save the lives of its soldiers who would regroup, to launch a counter offensive with the help of long-range Western weapons.
But Moscow said the capture of Lysychansk less than a week after taking neighbouring Sievierdonetsk meant it had "liberated" Luhansk. It said it will give Luhansk to the self-proclaimed Russian-backed Luhansk People's Republic whose independence it recognised on the eve of the war.
The battlefield focus now shifts to the neighbouring Donetsk region, where Kyiv still controls swathes of territory.
"If the commanders of our army withdraw people from certain points at the front, where the enemy has the greatest advantage in firepower, and this also applies to Lysychansk, it means only one thing," Zelenskiy said in his nightly video on Sunday.
"That we will return thanks to our tactics, thanks to the increase in the supply of modern weapons."
Zelenskiy said Russia was concentrating its firepower on the Donbas front, but Ukraine would hit back with long-range weapons such as the US-supplied HIMARS rocket launchers.
"The fact that we protect the lives of our soldiers, our people, plays an equally important role. We will rebuild the walls, we will win back the land, and people must be protected above all else," Zelenskiy said.
Since abandoning an assault on the capital Kyiv, Russia has concentrated its military operation on the industrial Donbas heartland that comprises the Luhansk and Donetsk regions, where Moscow-backed separatist proxies have been fighting Ukraine since 2014.
Russian Defence Minister Sergei Shoigu informed President Vladimir Putin that Luhansk had been "liberated", the defence ministry said, after Russia earlier said its forces had captured villages around Lysychansk and encircled the city.
Ukraine's military command said its forces had been forced to retreat from the city.
"The continuation of the defence of the city would lead to fatal consequences. In order to preserve the lives of Ukrainian defenders, a decision was made to withdraw," it said in a statement on social media.
Ukrainian officials, who say references to "liberating" Ukrainian territory are Russian propaganda, had reported intense artillery barrages on residential areas.
West of Lysychansk in Donetsk region, at least six people were killed when the Ukrainian city of Sloviansk was hit by powerful shelling from multiple rocket launchers on Sunday, local officials said.