Ukraine says Bakhmut battle continues after Russian forces claim victory

Paramilitary Wagner Group says it will hand over city to Moscow's regular army on June 1

Aerial images released by Ukraine's armed forces show the devastation in Bakhmut. AFP

Ukraine on Monday denied the battle for Bakhmut was over, even as Russian mercenaries declared victory after a brutal months-long struggle for the city.

Wagner Group chief Yevgeny Prigozhin said the city would be handed over to Moscow's regular army on June 1.

Mr Prigozhin said his troops are building “defence lines” as they prepare to leave Bakhmut in the coming days.

Kyiv acknowledged that Russia had taken most of the eastern city, but said fighting continued in its outskirts.

It said the battle had exhausted Russian forces and impaired their ability to go on the offensive.

“Despite the fact that we now control a small part of Bakhmut, the importance of its defence does not lose its relevance,” said Oleksandr Syrskyi, who commands Ukraine's ground forces.

“This gives us the opportunity to enter the city in case of a change in the situation. And it will definitely happen.”

Ukraine says its forces are still fighting for the outskirts of Bakhmut. AP

Ukrainian President Volodymyr Zelenskyy had said on Sunday that the city existed “only in our hearts” but denied it was in Russian hands.

Aerial images suggested there was little left to conquer after a long battle whose symbolic importance has surpassed Bakhmut's strategic value as an eastern staging post.

Retired British general Sir Richard Barrons said the Wagner Group appeared to have been “broken by Bakhmut”.

“Russia had to move precious reserves of people and ammunition to stop Ukrainian movement to the north and south of the city,” he told Sky News.

There were also reports on Monday of skirmishes within mainland Russia, following a series of mysterious explosions and suspected incidents of sabotage across the border.

The governor of the Belgorod region said a Ukrainian “sabotage group” had entered Russian territory and was being repelled by Moscow's forces.

Kyiv denied involvement and suggested “underground guerrilla groups” were behind the fighting.

“Ukraine is watching the events in the Belgorod region of Russia with interest and studying the situation, but it has nothing to do with it,” said Mr Zelenskyy's adviser Mykhailo Podolyak.