STORY: The head of Russia's Wagner mercenary group said on Wednesday his fighters had captured all of the eastern part of Bakhmut, in one of the bloodiest battles of the year-long war.
But Ukrainian defenders, who had appeared to be preparing for a tactical retreat from Bakhmut last week, on Wednesday remained defiant.
Ukrainian leaders now speak of hanging on to the city, and inflicting as many casualties as possible to grind down the Russian troops.
But Wagner boss Yevgeny Prigozhin said his fighters have taken control of the city's east.
If true, that would mean Russian forces now hold nearly half the city in their costly push to secure their first big victory in several months.
The mercenary leader said his fighters, who have been leading the attack on Bakhmut, were clearing the way for Russian forces.
"The world has not yet encountered the well-prepared Russian army, the regiments that have not been used in battle, that have all the possible modern ammunition and surveillance tools. They are perfectly ready and they are awaiting their moment.
But Prigozhin has issued premature success claims before and Reuters was not able to verify the situation on the ground.
Speaking before a meeting of European Union defense ministers in Stockholm, NATO Secretary-General Jens Stoltenberg said Russia was throwing more troops into the battle.
"What Russia lacks in quality, they try to make up in quantity. They have suffered big losses but at the same time we cannot rule out that Bakhmut may eventually fall in the coming days."
On Tuesday, a Ukrainian medic told Reuters that all roads out of the city were under constant heavy shelling.
"Ambulances and other vehicles come under shelling and for that reason it is very difficult to evacuate people. There are high losses, and among medics in particular."
A Ukrainian military drone showed the scale of destruction in Bakhmut -- apartment blocks on fire and smoke billowing from neighborhoods.
U.S. Director of National Intelligence Avril Haines on Wednesday described the fighting in Ukraine as "a grinding, attritional war."
She said U.S. intelligence does not foresee the Russian military recovering enough this year to make major territorial gains.