STORY: A video posted on social media by the Ukrainian president's chief of staff purports to show Ukrainian soldiers waving the national flag on the outskirts of the eastern town of Lyman, a longtime Russia bastion.

Kyiv says its forces have encircled the city, which is a key logistics hub in the Donetsk region.

The capture of Lyman would be a major setback for Russia, which moved to annex four regions, including Donetsk, after holding what it called referendums – votes that were denounced by Kyiv and Western governments as illegal and coercive.

A Ukrainian military spokesperson said the capture of Lyman would allow Kyiv to advance into the Luhansk region, whose full capture Moscow announced at the beginning of July after weeks of slow, grinding advances.