Moscow said Saturday it had withdrawn its troops from Lyman, a key town in eastern Ukraine that lies in one of the four Ukrainian regions that Russia has annexed.

Earlier in the day, Ukraine's defence ministry said its forces were entering the town.

"Ukrainian Air Assault Forces are entering Lyman, Donetsk region," the ministry said on Twitter, posting a video of soldiers holding up a yellow and blue Ukrainian flag near a sign with the town's name.

Embyy

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In its daily briefing, Russia's defence ministry said, "in connection with the creation of a threat of encirclement, the allied troops were withdrawn from the settlement of Krasny Lyman to more favourable lines."

Lyman lies in the north of Donetsk, which Moscow annexed despite only controlling part of the region.

Russia on Friday proclaimed four Moscow-held territories in Ukraine -- Donetsk, Lugansk, Zaporizhzhia and Kherson -- part of Russia, following hastily organised referendums denounced by Kyiv and the West.

"Ukraine's army has and will always have the decisive vote in today's and any future 'referendums'," the Ukrainian defence ministry said.

A spokesman for Ukraine's eastern forces, Serhiy Cherevatyi, said Saturday that several thousand Russian troops were "encircled" near Lyman.

The Kremlin-backed leader of Donetsk said Friday that Russian troops and their allies were holding on to Lyman with "their last strength".