KYIV (REUTERS) - Russian forces set their sights on their next objectives in Ukraine’s eastern Donetsk province, after President Vladimir Putin claimed victory in the neighbouring Luhansk province as the the five-month long war entered a new phase.

Ukrainian forces on Tuesday (July 5) took up new defensive lines in Donetsk, where they still control major cities, while Putin told his troops to “absolutely rest and recover their military preparedness,” while units in other areas keep fighting.

Russia’s capture of the city of Lysychansk on Sunday had completed its conquest of Luhansk, one of two regions in Donbas, the industrialised eastern region of Ukraine that has become the site of the biggest battle in Europe in generations.

Both sides have suffered heavy casualties in the fight for Luhansk, particularly during the siege of the twin cities of Lysychansk and Sievierodonetsk. Both cities have been left in ruins by the relentless Russian bombardment.

Since the outset of the conflict, Russia has demanded that Ukraine hand both Luhansk and Donetsk to pro-Moscow separatists, which have declared independent statelets.

“This is the last victory for Russia on Ukrainian territory,” Oleksiy Arestovych, adviser to President Volodymyr Zelensky, said in a video posted online.

“These were medium-sized cities. And this took from 4th April until 4th July – that’s 90 days. So many losses...”

Arestovych said besides the battle for Donetsk, Ukraine was hoping to launch counter offensives in the south of the country.

“Taking the cities in the east meant that 60 per cent of Russian forces are now concentrated in the east and it is difficult for them to be redirected to the south,” he said.

“And there are no more forces that can be brought in from Russia. They paid a big price for Sievierodonetsk and Lysychansk.”

Ukraine president Zelensky said on Monday that despite Ukraine’s withdrawal on Sunday from Lysychansk, its troops continued to fight.

“There have been no significant changes on the battlefield in the past 24 hours,” Mr Zelensky said in a nightly video message. “The Armed Forces of Ukraine respond, push back and destroy the offensive potential of the occupiers day after day. We need to break them. It is a difficult task. It requires time and superhuman efforts. But we have no alternative.”

During a brief televised meeting with his defence minister, Mr Putin congratulated Russian forces on their “victories in the Luhansk direction”.

Those who participated in the combat should “absolutely rest and recover their military preparedness”, while other units continue fighting in other areas, he said.

The battle in Luhansk is the closest Moscow has come to achieving one of its stated objectives since its forces were defeated trying to capture Kyiv in March, and marks Russia’s biggest victory since it captured the southern port of Mariupol in late May.

Both sides suffered thousands dead and wounded, while claiming to have inflicted far greater losses on their enemy, along a loop of the Siverskyi Donets river that winds through Luhansk and Donetsk.

Lysychansk, neighbouring Sievierodonetsk and surrounding towns – many with heavy industrialised plants that served as fortified bunkers for defenders – were razed to a wasteland by relentless Russian bombardment. Russia repeatedly tried and failed to surround the Ukrainians, eventually opting to blast them out instead with the brute force of its artillery.

Some military experts reckoned the hard fought victory had brought Russian forces little strategic gain, and the outcome of what has been dubbed the “battle of the Donbas” remained in the balance.

“I think it’s a tactical victory for Russia but at an enormous cost,” said Dr Neil Melvin of the RUSI think tank in London, comparing the battle to the huge fights over meagre territorial gains characteristic of World War I.

“This has taken 60 days to make very slow progress,” he said. “I think the Russians may declare some kind of victory, but the key war battle is still yet to come.”

Moscow will hope Ukraine’s retreat gives Russian forces momentum to push further West into neighbouring Donetsk province, where Ukraine still holds the cities of Sloviansk, Kramatorsk and Bakhmut.

‘It hurts a lot’

Ukraine, which could have withdrawn from Luhansk weeks ago but chose to keep fighting there to exhaust the invasion force, hopes the ferocity of the battle will leave the Russians too depleted to hold on to gains elsewhere.

Mr Serhiy Gaidai, Ukrainian governor of Luhansk, acknowledged that his entire province was now effectively in Russian hands, but told Reuters: “We need to win the war, not the battle for Lysychansk... It hurts a lot, but it’s not losing the war.”

Mr Gaidai said the Ukrainian forces that retreated from Lysychansk were now holding the line between Bakhmut and Sloviansk, preparing to fend off a further Russian advance.

The mayor of Sloviansk said heavy shelling on Sunday had killed at least six people, including a 10-year-old girl.

Russia’s Tass news agency quoted military officials in the Donetsk Peoples’ Republic as saying three civilians died and 27 were injured in what they said was shelling by Ukrainian forces.

Mr Rob Lee, of the US-based Foreign Policy Research Institute, said the new Ukrainian defensive line should be easier for Ukraine to defend than the pocket in Luhansk province it has given up.

“It’s something that Putin can show as a sign of success,” he said. “But overall, this doesn’t mean Ukraine will have to concede or give in any time soon.”

Mr Dmitry Medvedev, deputy head of Mr Putin’s security council, posted on social media that Ukraine was being egged on to keep fighting by Western leaders who “lose their minds at the sight of someone else’s blood”, and Ukraine’s own rulers who were driven by “cocaine ecstasy”.

Ukraine’s hopes for a counter-attack rest in part on receiving additional weapons from the West, including rockets that can neutralise Russia’s huge firepower advantage by striking deep behind the front line.

“It is a matter of how quickly the supplies come,” said Arestovych.

“In the West, there just aren’t enough weapons to be supplied. This is after all the biggest conflict since 1945... so more weapons have to be produced, and that production is on now. And at such a pace that by autumn there will be a very considerable set of weapons.”

Last week, Ukraine scored its own major victory, driving Russian forces off Snake Island, a desolate but strategic outcrop in the Black Sea that Moscow had captured on the war’s first day but could no longer defend from Ukrainian strikes.

Ukraine’s military said on Monday it had now hoisted its flag there.

Mr Zelensky said “colossal” funding would be needed to rebuild Ukraine’s shattered infrastructure.

Speaking at a conference in the Swiss city of Lugano, Ukrainian Prime Minister Denys Shmygal said the cost could reach US$750 billion and rich Russians should help pay the bill.

Dr Melvin, the RUSI expert, said the decisive battle for Ukraine was likely to take place not in the east, where Russia is mounting its main assault, but in the south, where Ukraine has begun a counter-offensive to recapture territory.

“This is where we see the Ukrainians are making progress around Kherson. There are counter-attacks beginning there and I think it’s most likely that we’ll see the momentum swing to Ukraine as it tries to then mount a large scale counter-offensive to push the Russians back,” he said.

Swedish Prime Minister Magdalena Andersson said the best way to end the war was to increase support to Ukraine and ramp up pressure on Russia.

“We are open to further sanctions” on Russia, Andersson said at a news conference alongside Zelensky earlier on Monday, adding that Moscow should not be allowed to make gains from its invasion.

Sweden, along with its neighbour Finland, recently applied for membership in Nato. Andersson said it could take a year before her country is a full member of the alliance.