KYIV/LVIV (REUTERS) - Talk of compromise from both Moscow and Kyiv has raised hopes of a breakthrough towards peace after three weeks of war.

The Financial Times (FT) on Wednesday (March 16) reported that Ukraine and Russia had made significant progress on a tentative 15-point peace plan.

The newspaper cited five people involved in the talks as saying the plan included a ceasefire and Russian withdrawal if Kyiv declares neutrality and accepts limits on its armed forces.

FT said the plan would involve Kyiv renouncing its ambitions to join Nato and promising not to host foreign military bases or weaponry in exchange for protection from allies such as the United States, Britain and Turkey.

The FT report also said Israel's Prime Minister Naftali Bennett has been the primary international mediator on the talks, following a surprise visit to Moscow on March 5, with back-to-back talks with leaders of Ukraine and Russia as recently as two days ago.

However, Kremlin spokesman Dmitry Psekov said on Wednesday it was too early to disclose any set of potential agreements between Moscow and Kyiv, according to the RIA news agency.

This comes as Ukraine's President Volodymyr Zelensky said negotiations were becoming "more realistic", while Russian Foreign Minister Sergei Lavrov said proposals now being discussed were "close to an agreement".

Russian President Vladimir Putin said Moscow was ready to discuss neutral status for its neighbour but would still achieve the goals of its operation, which he said was "going to plan".

He also said the West was set on provoking civil conflict in Russia and urged Russians to "spit out" what he called traitors among them.

On the 21st day of the conflict, Russian forces kept up their bombardments of besieged cities.

Russian troops have halted at the gates of the capital Kyiv after taking heavy losses and failing to seize any major city in a war Western officials say Moscow expected to win within days.

The Kremlin said negotiators were discussing status for Ukraine similar to that of Austria or Sweden, both members of the European Union that are outside the Nato military alliance.

Ukraine's chief negotiator said Kyiv was still demanding a ceasefire and the withdrawal of Russian troops, with guarantees.

The signs of compromise sent relief through global financial markets.

In what was seen as a major shift, Mr Zelensky had said on Tuesday Ukraine could accept international security guarantees that stopped short of its longstanding aim to join Nato.

Keeping Ukraine out of the Western military alliance was one of Russia's main demands before it unleashed what it calls a "special operation" to disarm its neighbour.

"Neutral status is now being seriously discussed along, of course, with security guarantees," Russia's Mr Lavrov said. "There are absolutely specific formulations which, in my view, are close to agreement."

Mr Vladimir Medinsky, Russia's chief negotiator, told state TV: "Ukraine is offering an Austrian or Swedish version of a neutral demilitarised state, but at the same time, a state with its own army and navy."

Mr Peskov said the idea "could really be seen as a compromise".

Austria and Sweden, the biggest of six EU members outside Nato, both have small militaries that cooperate with the alliance.

Ukraine's chief negotiator, Mr Mykhailo Podolyak, said Kyiv was seeking direct talks between Mr Zelensky and Mr Putin. Moscow has said they could meet but only to finalise an agreement already hammered out.

While Russia has long objected to Ukraine's Nato ambitions, Kyiv and its allies have said Moscow's true aim was to overthrow Ukraine's pro-Western, elected leaders, so far thwarted by Ukraine's stiff battlefield resistance.