Russian mercenary group Wagner claims to have taken control of the salt-mining town of Soledar in eastern Ukraine - a stepping stone in Moscow's push to capture the entire Donbas region - as fighting appears to continue.
The contract militia said on Tuesday night fighting was still going on in the town centre and the Kyiv government said its troops were still holding out.
From the outskirts, plumes of smoke could be seen rising over the town and incoming artillery fires was relentless.
A Reuters photographer saw many residents fleeing along roads out of the town in perishing cold.
With the war now in its 11th month, Russian commanders have targeted Soledar as a platform to attack the nearby city of Bakhmut, which has held out for months against a Russian onslaught.
A victory in Soledar would have symbolic, military and commercial value for Russia after a series of battlefield setbacks in recent months but its fate was not entirely clear on Wednesday morning.
Wagner head Yevgeny Prigozhin, an ally of Russian President Vladimir Putin, said late on Tuesday: "Wagner units took control of the entire territory of Soledar. A cauldron has been formed in the centre of the city in which urban fighting is going on."
A photograph posted on Wagner's Telegram channel appeared to show Prigozhin and his mercenaries inside a salt mine in Soledar.
His comment that fighting continued in the centre indicated Russian control was incomplete despite his statement all of the town was in Wagner's hands.
The Kyiv government said earlier its forces were holding out.
The Ukrainian military's morning summary made one mention of Soledar, listing it as one of several towns being shelled in the Donetsk region of the Donbas.
Reuters was unable to verify conditions on the ground.
The Russian state news agency RIA said Wagner had taken over Soledar's salt mines following "fierce fighting".
The entrance to the mines is located on the outskirts of Soledar.
Washington has said Prigozhin might want personal control of the area's mines.
The Ukrainian public broadcaster Suspilne on Wednesday morning quoted Serhiy Cherevatyi, spokesman for Ukraine's eastern forces, as denying Soledar was under Russian control.
"Wait for the details from the General Staff," he was quoted as saying.
A Reuters photographer said their team had tried to enter Soledar in recent days but had been unable to do so.
Along the road from Soledar to Bakhmut, ambulances were waiting ready to deal with the wounded and the scene in field hospitals was chaotic.
Ukrainian Deputy Defence Minister Hanna Maliar had said on Tuesday evening fighting for the town was still raging and the Russians were taking heavy losses.
"The approaches to our positions are simply strewn with the bodies of dead enemy fighters. Our fighters are bravely holding the defence," she said.
Soledar would be Russia's most substantial gain since August after a series of retreats throughout much of the second half of 2022.
Denis Pushilin, leader of the Russian-controlled part of Ukraine's Donetsk province, said the capture of Soledar would open up the prospect of seizing much more significant towns further west in what Russia has recognised as the Donetsk People's Republic, one of four provinces it declared annexed three months ago.
Troops from both sides have taken heavy losses in some of the most intense combat since Russia invaded Ukraine last February.
Russia began what it calls a "special military operation" in Ukraine on February 24, saying Ukraine's close ties with the West and ambitions to join NATO posed a security threat.
Kyiv and its allies accuse Moscow of an unprovoked war to seize territory from Ukraine.
A US official said Ukrainian troops were due to arrive in the US soon to begin training on Patriot air defence missiles.
Russia's ambassador to Washington said the move showed Washington's "de facto participation" in the conflict.