KYIV: Russia said on Saturday (Oct 1) it has withdrawn its troops from Lyman, a key town in eastern Ukraine that lies in one of the four Ukrainian regions that Russia annexed.
Ukraine's capture of Lyman marked a major setback for Moscow after President Vladimir Putin proclaimed the annexation of the Donetsk region, along with three other regions, at a ceremony on Friday that was condemned by Kyiv and the West as a farce.
"In connection with the creation of a threat of encirclement, the allied troops were withdrawn from the settlement of Krasny Lyman to more favourable lines," Russia's defence ministry said in its daily briefing, after Ukraine's army said it "encircled" several thousand Russian troops near the town.
The statement ended hours of official silence from Moscow after Kyiv first said it had surrounded thousands of Russian troops in the area and then that its forces were inside the town of Lyman.
Two grinning Ukrainian soldiers taped the yellow-and-blue national flag on to the "Lyman" welcome sign at the town's entrance in Donetsk region's north, a video posted by the president's chief of staff showed.
"Oct 1. We're unfurling our state flag and establishing it on our land. Lyman will be Ukraine," one of the soldiers said, standing on the bonnet of a military vehicle.
Russia had 5,000 to 5,500 troops at Lyman but the number of encircled troops could be lower because of casualties, Serhii Cherevatyi, spokesperson for Ukraine's eastern forces, said earlier.
"The Russian grouping in the area of Lyman is surrounded," the spokesperson said on television.
The Russian defence ministry's statement made no mention of its troops being encircled.
Neither side's battlefield assertions could be independently verified.
Russia has used Lyman as a logistics and transport hub for its operations in the north of the Donetsk region. Its fall marked Ukraine's biggest battlefield gain since a lightning counter-offensive in the northeastern Kharkiv region last month.
The Ukrainian military spokesperson said the capture of Lyman would allow Kyiv to advance into the Luhansk region, whose full capture Moscow announced at the beginning of July after weeks of slow, grinding advances.
"Lyman is important because it is the next step towards the liberation of the Ukrainian Donbas. It is an opportunity to go further to Kreminna and Sievierodonetsk, and it is psychologically very important," he said.
Donetsk and Luhansk regions together make up the wider Donbas region that has been a major focus for Russia since soon after the start of Moscow's invasion on Feb 24 in what it called a "special military operation" to demilitarise its neighbour.
Putin proclaimed the Donbas regions of Donetsk and Luhansk and the southern regions of Kherson and Zaporizhzhia to be Russian land in Friday's ceremony - a swathe of territory equal to about 18 per cent of Ukraine's total surface land area.
Ukraine and its Western allies branded Russia's move as illegal. Kyiv vowed to continue liberating its land from Russian forces and said it would not hold peace talks with Moscow while Putin remained as president.
Retired US General Ben Hodges, a former commander of the US Army in Europe, said a Russian defeat in Lyman after Putin's declaration would be a major political and military embarrassment for the Russian leader.
"This puts in bright lights that his claim is illegitimate and cannot be enforced," he said.
Ukraine's exiled governor of Luhansk said earlier that Russian forces had asked for a safe exit out of the encirclement, but Ukraine rejected the request.
The Ukrainian General Staff told Reuters it had no such information.