Russia said Saturday it has captured the east Ukrainian city of Bakhmut, epicentre of the fighting, as President Vladimir Putin congratulated his troops and private mercenary group Wagner.
The announcement from the Russian army came hours after Kyiv said the battle was continuing, while admitting the situation was "critical", and with Ukrainian leader Volodymyr Zelensky meeting G7 leaders in Japan.
Bakhmut, a salt-mining town that once had a population of 70,000 people, has been the scene of the longest and bloodiest battle in Moscow's more than year-long Ukraine offensive.
The fall of Bakhmut, where both Moscow and Kyiv are believed to have suffered huge losses, would allow Moscow to bring home a key victory after a series of humiliating defeats.
It would also come before a major counteroffensive that Kyiv has been preparing for months. Zelensky himself has warned that the fall of the city would open the way for Russian troops to capture more parts of Donbas.
"As a result of offensive actions of the Wagner assault units, with the support of artillery and aviation of the 'Southern' unit, the liberation of the city of Artemovsk was completed," Russia's defence ministry said, using the Soviet-era name of Bakhmut.
"Vladimir Putin congratulated the assault units of Wagner as well as all servicemen of units of the Russian armed forces who provided them with the necessary support and flank cover, on the completion of the operation to liberate" the city, the TASS news agency quoted a Kremlin statement as saying.
Wagner's boss Yevgeny Prigozhin earlier claimed the city had fallen to his mercenaries in a video posted on Telegram, in which fighters held Russian flags against a backdrop of ruins.
"Today on May 20, around midday, Bakhmut was taken in its entirety," Prigozhin said in the video, adding that Wagner fighters would search the captured city before handing it over to the Russian army.
"By May 25 we will completely examine (Bakhmut), create the necessary lines of defence and hand it to the military," Prigozhin said. "We ourselves will go into field camps."
Artillery sound could be heard in the background of Prigozhin's video.
'Bakhmut will be liberated'
Ukraine, which this month claimed successes in and around Bakhmut, said earlier that the battle was not over.
"Heavy fighting in Bakhmut. The situation is critical," Deputy Defence Minister Ganna Malyar posted on Telegram.
She said Ukrainian troops were "holding the defence" in the city's "airplane area".
"As of now, our defenders control certain industrial and infrastructure facilities in the area," she said.
It was not possible for AFP to verify either claim.
Russia's announcement that the city had fallen came hours ahead of Zelensky's meeting Sunday with US President Joe Biden in Japan, during the G7 summit.
Biden, who has spearheaded Western backing of Ukraine with sanctions and supplies, "looks forward" to the meeting, a senior administration official said, adding that it is expected to take place after 2pm (0500 GMT) Sunday.
Zelensky made a surprise appearance Saturday at the summit in Hiroshima – another diplomatic coup a day after he attended the Arab League summit in Saudi Arabia.
The Ukrainian president, who was flown in on a French government plane, was able to meet not just G7 leaders but those from other key international players such as unaligned powers Brazil and India.
The fruits of his diplomatic efforts have already paid off, with the US announcing Friday that it would allow Kyiv to acquire F-16 fighter jets, the most sophisticated material yet supplied by the West.
ICC denounces Moscow warrant
Prigozhin meanwhile continued his running battle with Russia's military establishment.
"The operation to capture Bakhmut – the Bakhmut meat grinder – lasted 224 days," Prigozhin said, wearing a camouflage uniform. Moscow's losses would have been far smaller if it was not for incompetent generals, he added.
Wagner, which spearheaded the fight for Bakhmut, is believed to have suffered huge losses in the months-long storming of the city. Prigozhin has long complained about Wagner not being given appropriate amounts of ammunition.
"There was only Wagner here (in Bakhmut)," he said in the video. "We fought not only the Ukrainian army here, we fought Russian bureaucracy."
He blamed Defence Minister Sergei Shoigu and Chief of General Staff Valery Gerasimov for turning the offensive into "their own amusement".
The two camps are now awaiting a counteroffensive announced by Ukrainian authorities who are backed by Western arms deliveries. Zelensky said recently that his army needs more time before launching the assault.
The International Criminal Court on Saturday denounced the previous day's "unacceptable" move by Moscow to put ICC prosecutor Karim Khan on a wanted list over his issuance of an arrest warrant for Putin.
"The court will remain undeterred in the conduct of its lawful mandate to ensure accountability for the gravest crimes," the Hague-based tribunal said.