Russia's private army Wagner claimed Saturday the total control of the east Ukrainian city of Bakhmut, the epicenter of fighting, as Kyiv said the battle was continuing but admitted the situation was "critical".
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 to Russia of Bakhmut, where both Moscow and Kyiv are believed to have suffered huge losses, would have high symbolic value.
If confirmed, Bakhmut's loss would allow Moscow to bring home a victory after a series of humiliating defeats.
It would also come before a major counteroffensive that Kyiv has been preparing for months.
The announcement by Wagner came as Ukrainian President Volodymyr Zelensky took part in the G7 summit in Japan.
The mercenary group's boss Yevgeny Prigozhin claimed the city had fallen to his mercenaries in a video posted on Telegram, in which fighters held Russian flags on the 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 official Russian army.
"By May 25 we will completely examine (Bakhmut), create the necessary lines of defense 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.
Ukraine, which earlier this month claimed successes in and around Bakhmut, said the fighting for the city was ongoing.
"Heavy fighting in Bakhmut. The situation is critical," deputy defense minister Ganna Malyar posted on Telegram.
She said Ukrainian troops were "holding the defense" 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 claims.
'Bakhmut meat grinder'
Wagner has spearheaded the fight for Bakhmut and is believed to have suffered huge losses in the months-long storming of the city.
"The operation to capture Bakhmut — the Bakhmut meat grinder — lasted 224 days," Prigozhin said, wearing a camouflage uniform.
Prigozhin, embroiled in an increasingly public fight with the official Russian army, said Moscow's losses would have been far smaller if it was not for incompetent generals.
He has long complained about Wagner not being given the appropriate amount 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 did not reveal how many Wagner fighters have died in Bakhmut but said losses were "five times higher" due to Russia's military leadership.
He blamed Defence Minister Sergei Shoigu and Chief of General Staff Valery Gerasimov for turning the offensive into "their own amusement".
"One day in history they will pay for their actions," Prigozhin said.
Wagner ranks included an unknown number, believed to be high, of ex-convicts after Prigozhin toured Russian prisons last year to attract prisoners, promising them an amnesty upon their return should they survive.
"The generals, ex-employees of law enforcement, of the FSB (security service) and the former convicts were active here as one team," Prigozhin said.
He has recently delivered unprecedented attacks against Moscow's military leadership.
The front in eastern Ukraine was largely frozen until last winter, with much of the fighting taking place around Bakhmut.
The two camps are now awaiting a counteroffensive announced by Ukrainian authorities who are backed by Western arms deliveries.
Zelensky has said recently that his army needs more time before launching the assault.