KYIV - Ukraine made its boldest claim yet of success on the battlefield in its week-old counter-offensive against Russian forces in the south, while European markets reopened in free fall on Monday after Russia kept its main gas pipeline to Germany shut.
After days of declining to give details about their new offensive, Ukrainian officials posted an image online of three soldiers raising a flag over a town in Kherson province, a southern region occupied by Russia since the war's early days.
The image of the flag being fixed to a pole on a rooftop, purportedly in Vysokopyllya in the north of Kherson, was released as President Volodymyr Zelensky announced in an overnight address that Ukrainian forces had captured two towns in the south and one in the east. He did not identify the locations.
After months of enduring punishing Russian artillery assaults in the east, Ukraine has at last begun its long-awaited counter-attack, its biggest since it drove Russian forces away from the outskirts of Kyiv in March.
Ukraine has kept most details of its new campaign under wraps, banning journalists from the front line and offering little public commentary in order to preserve tactical surprise.
Russia said it has repelled assaults in Kherson. In a rare acknowledgement from the Russian side that the Ukrainian counter-offensive was spoiling Moscow's plans for territory it has seized, Tass news agency quoted a Moscow-installed official in Kherson as saying plans for a referendum to annex the region to Russia have been put on hold due to the security situation.
Mr Mark Hertling, a retired former commander of US ground forces in Europe, said Kyiv's aim appeared to be to trap thousands of Russian troops on the east bank of the vast Dnipro River, destroying bridges the Russians now use for supplies and would need to escape.
Russia left "a force in Kherson, with a river at their back & limited supply lines", and Ukraine was hitting them with "precision weapons, confusing a RU force that already has very low morale and poor leadership", Mr Hertling said in a tweet.
Mr Zelensky's announcement that a town had been captured in the east was also notable, a suggestion Ukraine was taking advantage of pressure in the south to try to reverse some of the gains Russia made elsewhere in recent months.
In his evening address on Sunday, Mr Zelensky tempered his announcements of success with a warning to European countries that they could face a cold winter.
Moscow blames Western sanctions that it says have interfered with repairs of equipment for forcing it to halt the flow of gas through Nord Stream 1, its main pipeline to Germany. Russia was due to reopen the pipeline on Saturday but has said it will stay shut indefinitely. "Problems with gas supply arose because of the sanctions imposed on our country by Western states, including Germany and Britain," Kremlin spokesman Dmitry Peskov said on Monday.
European countries have called the gas cut-off blackmail. They say they are finding alternative sources of gas and are already ahead of targets in filling up storage tanks for winter.
But the weekend news about Nord Stream's extended shutdown sent prices soaring once again on Monday, with the main European benchmark up by as much as 35 per cent, bringing fears of a bleak winter for consumers and businesses across the continent.
The euro sank below 99 US cents for the first time in decades, and the pound was not far off mid-1980s lows against the US dollar as Ms Liz Truss was announced as Britain's next prime minister.
Speaking shortly beforehand, Kremlin spokesman Peskov was scathing about Ms Truss, saying it was hard to imagine relations getting any worse, but that a worsening could not be ruled out, given what he called anti-Russian rhetoric from Britain.
"I don't think that we can hope for anything positive," he said. REUTERS