Vladimir Putin ordered his generals to recapture as quickly as possible a part of the Kursk region of Russia seized by Ukrainian forces in a surprise attack last summer.
The Russian president is believed to be delaying agreeing to a ceasefire as he tries to retake Kursk and grab as much of Ukraine as possible before peace talks.
Moscow has claimed it is on the cusp of retaking Kursk from Ukrainian forces as Putin met with troops in the embattled Russian region.
The Ministry of Defence in Moscow said on Thursday that Russian forces have retaken control of Sudzha, a major town in Russia's western Kursk region.
Moscow's troops had also recaptured two other villages, Melovoi and Podol, the ministry added.
The recapture of Sudzha would be a significant gain for Russia as it battles to eject Ukrainian forces from their foothold in Kursk, which they have been clinging to since last August.
Kyiv troops are reported to be withdrawing to avoid heavy casualties.
The Russian president, dressed in military fatigues, ordered top commanders to defeat Ukrainian forces in Kursk as soon as possible after the United States asked him to consider a 30-day ceasefire proposal.
Ukrainian forces smashed across the Russian border in August and grabbed a slice of land inside Russia in a bid to distract Moscow’s forces from the front lines in eastern Ukraine and to gain a potential bargaining chip.
But the Russian military claims that a lightning advance over the past few days has left Ukraine with a sliver of less than 77 square miles in Kursk, down from 500 square miles at the peak of the incursion last summer.
“Our task in the near future, in the shortest possible timeframe, is to decisively defeat the enemy entrenched in the Kursk region,” Putin told generals in remarks televised late on Wednesday.
“And of course, we need to think about creating a security zone along the state border.”

On Thursday, the Kremlin said Russia was in the final stage of removing Ukrainian forces from Kursk, according to state news agency TASS.
The remarks by Putin, dressed in a green camouflage uniform, came as US President Donald Trump said he hoped Moscow would agree to a ceasefire and said that if not then Washington could cause Russia financial pain.
Valery Gerasimov, the chief of Russia’s General Staff, told Putin that Russian forces had pushed Ukrainian forces out of over 86% of the territory they had once held in Kursk.
Gerasimov said Ukraine’s plans to use Kursk as a bargaining chip in possible future negotiations with Russia had failed and its gambit that its Kursk operation would force Russia to divert troops from its advance in eastern Ukraine had also not worked.
He said Russian forces had retaken 24 settlements and 100 square miles of land from Ukrainian forces in the last five days along with over 400 prisoners.
The US on Tuesday agreed to resume weapons supplies and intelligence sharing with Ukraine after Kyiv said at talks in Saudi Arabia that it was ready to support a ceasefire proposal.
The Kremlin on Wednesday said it was carefully studying the results of that meeting and awaited details from the US.