Russian has claimed it has taken the besieged city of Mariupol and surrounded 2,000 people in a factory.
Russian defence minister Sergei Shoigu has told Vladimir Putin that the southern port city has been taken, news agency Interfax reported this morning.
If his claims are true, then Russia will have gained a major strategic advantage, as holding Mariupol would allow Putin's forces sea access and a potential route to Kyiv from the south.
It will be the first major city that Putin's men have captured during the war.
Shoigu said that 2,000 people remained in the Azovstal plant, a vast steelworks where the Ukrainian forces had gathered, but that they were blockaded in.
Ukrainian President Volodymyr Zelensky likened the Russian's actions to "terrorism" and said that women and children were currently stuck in the steelworks.
Russia-backed separatists began advancing into the plant on April 19 with “attack groups formed for storming the facility.”
Today Putin ordered the Russian military to cancel plans to storm the Azovstal plant and said he wanted it to continue to be securely blockaded instead.
Russia will now attempt to force the remaining troops in the steelworks to surrender by enforcing a complete blockade of the plant.
With no chance of supplies getting into Azovstal, those inside will not able to hold out indefinitely.
Carefully reading his words to Putin who sat close by across a small desk, Shoigu said: “As of today, all of Mariupol is under the control of the Russian Army.
"The people's militia of the Donetsk People's Republic and the Azovstal plant with the remnants of nationalists and foreign mercenaries is securely blocked.”
Putin has said blockaded the plant was preferable to engaging in combat, which he described as "unreasonable", and claimed that those who surrender would be given medical help.
"I consider the proposed storming of the industrial zone unnecessary," Putin told Shoigu in a televised meeting at the Kremlin. "I order you to cancel it."
"There is no need to climb into these catacombs and crawl underground through these industrial facilities.
"Block off this industrial area so that a fly cannot not pass through."
Putin claimed that Russian efforts to "liberate" Mariupol - which lies in smouldering ruins - had been successful.
Shoigu said that the situation in Mariupol was now "calm" after Russia evacuated 142,000 civilians to safety.
His claims have yet to be independently verified and come after evacuation efforts from the city were widely seen as a failure.
Western reports suggested just a few dozen people were able to escape Mariupol yesterday.
Yesterday Zelenskiy has said an estimated 1,000 civilians are also sheltering at the steel works.
Today he warned that Ukrainian forces in Azovstal may be able to hold their positions for several hours more.
"The people who are in the factory today and do not allow us to capture this small part of the ruined city are our border guards, the National Guard and the police, there are about a thousand locals, women who are hiding with children who are just afraid to leave, so that the locals who came out were killed by shells," he said of the situation in the plant.
"There (in Mariupol) everything was destroyed, 95-98% of all building. There is bombing from planes, artillery and missile damage. And they shoot everywhere, all over the city, and therefore a large number of people - they are afraid to even come out (from the shelters).
Zelensky added: "It's more like not a war, but such a terrorist operation by Russia against Mariupol and the people of this city."
While avoiding a full-out battle at the steelworks may make strategic military sense for the Russians, it robs Putin of being able to make a full and much needed declaration of victory.
Over the past week the situation in Mariupol had become increasingly desperate after the Russians concentrated their assault on the south and east of Ukraine.
Ukrainian soldiers, including the controversial Azov Battalion, remain in the city having previously ignored calls to surrender.
Viktor Macha, a Czech industrial photographer who visited the Azovstal steelworks in 2016, believes the Ukrainian forces chose the the plant as a base because of the “badass bomb shelters” built beneath it.
Before the full-scale Russian invasion of Ukraine, the plant employed more than 10,000 people.
The city has endured some of the worst tragedies in the course of the war so far.
In March a maternity hospital was destroyed by Russian shelling there, claiming the lives of several people including mothers and a child.
Despite a large written warning that children were sheltering inside, the Russians bombed a Mariupol theatre, trapping more than a thousand people inside for days and claiming up to 300 lives.
In recent weeks the food and medicine situation has become increasingly desperate for those trapped in the city as Russian forces encircled its perimeter.
Mariupol, once a prosperous city of 400,000, is now a wasteland where corpses lie in the streets and Russia was hitting the Azovstal steel plant with bunker-buster bombs, the government in Kyiv said.
Large black clouds of smoke billowed from there on Wednesday as evacuees queued to get onto buses, some clutching luggage or carrying small pets in their arms.
Pensioner Tamara, 64, said she was going to stay with her sister in Zaporizhzhia after leaving the city with her husband, daughter, son-in-law and grandson yesterday.
"It is a pleasure...to leave after this nightmare. We lived in basements for 30 days," she said tearfully.
Ukraine's Deputy Prime Minister Iryna Vereshchuk accused Russian forces of failing to observe a local ceasefire agreement long enough to allow large numbers of people to leave.
