KYIV/SVITLODARSK, MAY 26

Advancing Russian forces came closer to surrounding Ukrainian troops in the east, briefly seizing positions on the last highway out of a crucial pair of Ukrainian-held cities before being beaten back, a Ukrainian official said on Thursday.

Three months into its invasion of Ukraine, Russia has abandoned its assault on the capital Kyiv and is trying to consolidate control of the industrial eastern Donbas region, where it has backed a separatist revolt since 2014.

It has poured thousands of troops into its assault, attacking from three sides in an attempt to encircle Ukrainian forces in Sievierodonetsk and Lysychansk. The fall of the two cities, which straddle the Siverskiy Donets river, would bring nearly the whole of Luhansk province under Russian control, a key Kremlin war aim.

"Russia has the advantage, but we are doing everything we can" in the battle in the area, said General Oleksiy Gromov, deputy chief of the main operations department of Ukraine's general staff.

Serhiy Gaidai, governor of Luhansk province, said around 50 Russian soldiers had reached the highway and "managed to gain a foothold for some time. They even set up some kind of checkpoint there".

"The checkpoint was broken, they were thrown back. That is to say, the Russian army does not control the route now, but they are shelling it," he said in an interview posted on social media. He hinted at further Ukrainian withdrawals, saying it was possible troops would leave "one settlement, maybe two. We need to win the war, not the battle".

"It is clear that our boys are slowly retreating to more fortified positions - we need to hold back this horde," he said.

Western military analysts see the battle for the two cities as a potential turning point in the war, now that Russia has defined its principal objective as capturing the east.

'SOBERING'

Reuters journalists operating in Russian-held territory further south saw proof of Moscow's advance in the town of Svitlodarsk, where Ukrainian forces withdrew earlier this week.

The town is now under firm control of pro-Russian fighters, who have occupied the local government building and hung a red flag bearing the Soviet hammer and sickle at the door.

Drone footage filmed by Reuters of the nearby abandoned battlefield showed scores of craters pockmarking a green field surrounded by wrecked buildings. Pro-Russian fighters were milling about in trenches.

Russia's recent gains in the Donbas follow the surrender of Ukraine's garrison in Mariupol last week, and suggest a shift in momentum on the battlefield after weeks in which Ukrainian forces had advanced near Kharkiv in the northeast.

"Recent Russian gains offer a sobering check on expectations for the near term," tweeted defence analyst Michael Kofman, director of Russian studies at the US-based CNA think-tank.

Russian troops have broken through Ukrainian lines at Popasna, south of Sievierodonetsk, and are threatening to encircle Ukrainian forces, he wrote.

"The extent to which this breakthrough at Popasna threatens Ukraine's overall position depends on whether or not Russian forces gain momentum."

Ukrainian interior ministry adviser Vadym Denisenko told a briefing 25 Russian battalions were attempting to surround the Ukrainian forces.

HOMES DESTROYED

A few weeks ago, it was Ukrainian forces that were advancing, pushing Russian troops back from the outskirts of Kharkiv towards the Russian border. But Moscow appears to have halted its retreat there, retaining a strip of territory along the frontier and preventing Ukrainian troops from cutting Russian supply lines that run east of the city to the Donbas.

Multiple blasts could be heard in central Kharkiv on Thursday as Russian forces dug in and maintained control of positions in villages to the north. Governor Oleh Synehubov said shelling had killed four people.

"It's loud here but it's home at least," said Maryna Karabierova, 38, as another blast could be heard nearby. She had returned to Kharkiv after fleeing to Poland and Germany earlier in the war. "It can happen at any time, at night, during the day: this is what life is here."

The Donbas advance has been backed by massive artillery bombardment. Ukraine's armed forces said more than 40 towns in the region had been shelled in the past 24 hours, destroying or damaging 47 civilian sites, including 38 homes and a school.

In a speech by videolink to leaders of other ex-Soviet states, President Vladimir Putin played down the impact of sanctions imposed by Western countries and the suspension of operations in Russia by many international companies.

"Representatives of our businesses face problems, of course, especially in the field of supply chains and transport. But nevertheless, everything can be adjusted, everything can be built in a new way," Putin said.

Russian bailiffs have seized more than 7.7 billion roubles ($123.2 million) from Google GOOGL.O that the US tech giant had been ordered to pay in a fine, Interfax news agency reported. Google's Russian unit said last week it planned to file for bankruptcy after authorities seized its bank account.

Global attention this week has focused on Russia's blockade of Ukraine's Black Sea ports, which has halted exports from one of the world's biggest suppliers of grain and cooking oil.

Western countries say Moscow is blackmailing poor countries by causing a global food crisis. Russia says it will open the ports if sanctions are lifted.

Kremlin spokesperson Dmitry Peskov said Moscow expects Ukraine to accept its demands at any future peace talks. It wants Kyiv to recognise Russian sovereignty over the Crimea peninsula Moscow seized in 2014, and the independence of separatist-claimed territory.

In a speech to dignitaries in Davos, Switzerland, German Chancellor Olaf Scholz said Putin must not be permitted to impose peace terms.

"There will be no dictated peace," Scholz said. "Ukraine will not accept this, and neither will we."