Lugansk

Russian forces engaged in an all-out battle in eastern Ukraine have captured the strategic town of Lyman and surrounded a key industrial centre, Moscow has claimed.

But a Ukrainian official has denied that the city of Severodonetsk -- the focus of weeks of fierce fighting -- has been encircled, saying government troops had repelled Russian forces from its outskirts.

Ukraine has pledged to do "everything" to defend Donbas, where an intensifying Russian offensive is prompting Kiev's forces to consider a strategic retreat from some key areas to avoid being surrounded.

Washington's UN envoy accused Russia on June 11 of spinning "outright lies" on Ukraine designed to hide the Kremlin's direct involvement in a war it launched to thwart Kiev's pro-Western drive.

Ukraine and pro-Russian rebels were on Dec. 27 set to complete a swap of hundreds of prisoners as part of a new push for peace that came despite Kiev's decision to cut off key transport links to breakaway Crimea.
 

Crisis-hit Ukraine won a vital reprieve from Russia on Monday when Moscow pushed back until next week a possible cut in gas shipments that would also impact parts of Europe.