A district south of the city of Lysychansk in Ukraine's eastern Luhansk region was "fully occupied" by Russian forces as of Friday morning, a local Ukrainian official said on television.
"Unfortunately, as of today... the entire Hirske district is occupied," Hirske's municipal head Oleksiy Babchenko said on a television broadcast. "There are some insignificant, local battles going on at the outskirts, but the enemy has entered."
The loss of Hirske and several other settlements around it leaves Lysychansk, the last major Ukrainian-controlled city in Luhansk, in danger of being enveloped from three sides by advancing Russian forces.
Russia's defence ministry said on Friday it had encircled about 2,000 Ukrainian troops, including 80 foreign fighters, at Hirske. Reuters could not independently verify the claim.
Ukraine signalled on Friday its troops were withdrawing from Lysychansk's sister city Sievierodonetsk, the scene of weeks of intense bombardments and street fighting, in what would be a significant setback in its struggle to defeat Russian forces.