Ukrainian forces have held out against Russian attacks in the city of Bakhmut, while the top US diplomat told his Russian counterpart — in their first face-to-face encounter since the invasion — that the Kremlin must stop its war.
In Moscow, President Vladimir Putin said Russia had been hit by what he called a terrorist attack in its southern Bryansk region bordering Ukraine.
Mr Putin vowed to crush what he said was a Ukrainian sabotage group that had fired at civilians.
Russia's FSB security force said later that the situation there was "under control".
Near the frontlines, west of Bakhmut, in the Ukrainian-held town of Chasiv Yar, the thump of outgoing artillery fire could be heard on Thursday morning, local time.
In nearby towns and villages, new trenches had been dug on the roadside, 20-40 metres apart, a sign that Ukrainian forces were strengthening defensive positions west of the ruined city.
Residents trickled out of the area, carrying bags.
"We remained until the very last. We wanted to stay. But how can we? Our neighbour's flat has now been destroyed. It is time to go," Svitalana, 47, told Reuters journalists.
Battle for Bakhmut becomes bloodiest in war
Bakhmut has been reduced to a blasted wasteland, with a few thousand of its 70,000 pre-war civilian population still inside as armies battle street-by-street.
Russian soldiers, bolstered by mercenaries of the Wagner private army, have been advancing north and south of the city to cut it off.
Moscow, which lost territory throughout the second half of 2022, said taking Bakhmut would be a step towards seizing the rest of the surrounding Donbas region.
Kyiv said the city had limited strategic value but it was exhausting Russia's invasion force in what has become the bloodiest battle of the war.
"Sooner or later, we will probably have to leave Bakhmut. There is no sense in holding it at any cost," Ukrainian politician Serhiy Rakhmanin said late on Wednesday.
The aim was to "inflict as many Russian losses as possible", he said.
In the southern city of Zaporizhzhia, Russian missiles crashed into a five-story apartment block overnight, collapsing upper floors.
Police said at least four people had been killed.
Evacuated residents, in shock, were being kept warm aboard a bus while crews tried to clear the debris.
"The people were screaming from under the rubble," resident Yuliia Kharytenko, 36, told Reuters.
US backs Ukraine as long as necessary
The war, now in its second year, dominated a foreign ministers' meeting in New Delhi of the G20 group of big economies, one of the last international forums involving senior Western officials where Russia is still invited.
A US official said Secretary of State Antony Blinken spoke briefly to Russian Foreign Minister Sergei Lavrov on the sidelines and told him Washington would back Ukraine as long as necessary and that Moscow must cease the war.
The unscheduled encounter was not considered a formal meeting but was nonetheless marked the first time they had met face-to-face since Russia sent it troops over the border into Ukraine on February 24 last year.
A State Department spokesperson said the US was not expecting formal, senior-level dialogue with Russia in the near term.
In Washington, national security spokesman John Kirby said US President Joe Biden and German Chancellor Olaf Scholz will discuss Ukraine's needed assistance when they meet on Friday at the White House.
The United States will announce a new military aid package for Ukraine on Friday, Mr Kirby said.
Earlier in New Delhi, Western powers urged the Group of 20 countries to keep up pressure on Moscow to end the conflict.
"We must continue to call on Russia to end its war of aggression and withdraw from Ukraine for the sake of international peace and economic stability," Mr Blinken told the meeting.
He was backed by his counterparts from Germany, France and the Netherlands.
Russia, which calls its actions in Ukraine a "special military operation", hit back.
Mr Lavrov accused the West of turning work on the G20 agenda into a "farce" and said Western delegations wanted to shift responsibility for their economic failures onto Moscow.
FSB says Ukrainian nationalists attacked Russia
A reported raid into the village of Lubechanye near the border in Russia's Bryansk province comes days after Moscow said Kyiv had attacked targets deep inside its territory with drones.
In videos circulating online, armed men calling themselves the "Russian Volunteer Corps" said they had crossed the border to fight "the bloody Putinite and Kremlin regime".
Describing themselves as Russian "liberators", the armed men called on Russians to take up arms and rise up against the authorities.
They denied firing on civilians.
Reuters could not verify the authenticity of the footage.
Mr Putin, in a televised address, called the action a terrorist attack and accused the group of opening fire on civilians in a car, including children.
Bryansk Governor Alexander Bogomaz said the attack had killed two people and wounded an 11-year-old boy.
"They won't achieve anything. We will crush them," Mr Putin said, adding that the group was made up of the kind of people who wanted to rob Russia of its history and language.
In an initial statement , the FSB security service said that, with the army, they were trying to liquidate "an armed group of Ukrainian nationalists" who had crossed the border.
In a later update, the FSB said the situation was under the control of law enforcement agencies.
It said a large number of explosive devices had been found and de-mining was taking place.
Ukrainian presidential aide Mykhailo Podolyak called the Russian reports of the incident "a classic deliberate provocation".
Moscow "wants to scare its people to justify the attack on another country & the growing poverty after the year of war", he tweeted.
However, he also implied an attack was under way, carried out by Russian partisans.
"Fear your partisans," he wrote.
Reuters/ABC
