Updated

Russia suffered another setback during Ukraine's counteroffensive, confirming it withdrew troops from the eastern town of Lyman, within the newly annexed Donetsk region.

Ukraine’s armed forces on Saturday said they had "liberated" five settlements in the Donetsk region and encircled thousands of Russian soldiers.

"Due to the risk to be encircled, the allied forces were withdrawn from Krasny Liman to more advantageous frontiers," Russia's Ministry of Defense said Saturday.

"The Russian troops in the area of Lyman are encircled. Yampil, Novoselivka, Shandryholove, Drobysheve, and Stavky settlements are liberated. Stabilization measures are being conducted there," Serhii Cherevatyi, Speaker of the Eastern group of troops, told a Ukrainian news outlet reported Pravda.

The advancement comes one day after Russian President Vladimir Putin declared a land grab for not only Donetsk but the Luhansk, Zaporizhzhia and Kherson regions as well. 

Lyman

FILE PHOTO: An Ukrainian soldier looks out from a tank, amid Russia's invasion of Ukraine, in the frontline city of Lyman, Donetsk region, Ukraine, April 28, 2022.  (REUTERS/Jorge Silva/File Photo)

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Putin warned that Russia will now treat any attack on the four regions as an attack on mainland Russia, calling the Ukrainians still residing in the war-torn regions "forever" Russians.

But Ukrainian forces have been making advances in western Luhansk and northern Donetsk as they inch toward the strategically important city of Sievierodonetsk, which Russia has occupied since June.

Cherevatyi said that some 5,000 to 5,500 occupiers were in Lyman, but noted it was difficult to estimate the number of troops in the areas surrounding the town due to the fluid movement of troops in combat zones. 

Ukraine soldiers in Izyum

Ukrainian soldiers sit on infantry fighting vehicles as they drive near Izyum, eastern Ukraine on September 16, 2022, amid the Russian invasion of Ukraine.  (JUAN BARRETO/AFP via Getty Images)

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The spokesman said that some Russian troops tried to unsuccessfully break through Ukraine’s barricade near the city while others had begun to surrender. 

Taking Lyman is a significant strategic win for Ukraine but Cherevatyi said the fight to fully liberate the city was not over. 

Azovstal Mariupol Ukraine

A serviceman of Donetsk People's Republic militia stands guard not far from the besieged Mariupol's Azovstal steel plant in Mariupol, in territory under the government of the Donetsk People's Republic, eastern Ukraine, Wednesday, May 18, 2022.  (AP Photo)

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Lyman has served as a major logistics and transport hub for Russian forces and its operations in northern Donetsk, reported Reuters.

Securing the city is the biggest battlefield win for Ukraine since it forced Russian troops to withdraw from roughly the entire Kharkiv region in a major counter-offensive last month.