Russian troops are moving into the city of Sivierodonetsk from the outskirts, Luhansk region governor Serhiy Gaidai said on Monday.
Sievierodonetsk, the largest city that Kyiv still partly controls in the Luhansk region of the Donbas, has been the focus of Russia's attacks in eastern Ukraine.
"Unfortunately we have disappointing news, the enemy is moving into the city," Gaidai told national television.
He said the neighboring city of Lysychansk was still under Ukrainian control, while the main road into the two cities has been shelled, but not blocked.
Having failed to take the capital Kyiv in the early phase of the war, Russia is seeking to consolidate its grip on the Donbas, large parts of which are already controlled by Moscow-backed separatists.
"Capturing Sievierodonetsk is a fundamental task for the occupiers ... We do all we can to hold this advance," Ukrainian President Volodymyr Zelenskyy said in a televised speech.
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Unlike in the previous stages of the war, which Moscow calls a "special military operation" to demilitarize Ukraine and rid it of nationalists threatening Russian-speakers there, Russia has concentrated its firepower on a small area.
"They (Russian army) use the same tactics over and over again. They shell for several hours – for three, four, five hours – in a row and then attack. Those who attack die. Then shelling and attack follow again, and so until they break through somewhere," Gaidai said.