This photograph taken on October 1, 2022 shows a burnt car on a road near Izyum, eastern Ukraine, amid the Russian invasion of Ukraine. AFP
The recapture of Lyman -- which Moscow's forces pummelled for weeks to control this spring -- would mark the first Ukrainian military victory in territory that the Kremlin has claimed as its own and has vowed to defend by all possible means.
Ukraine's defence ministry announced its forces were "entering" Lyman in the eastern Donetsk region after Kyiv's army said it had "encircled" several thousand Russian troops near the town.
The ministry posted a video of soldiers holding up a yellow and blue Ukrainian flag near a sign with the town's name.
Shortly after Ukraine's announcement, Russia's defence ministry said it had "withdrawn" troops from Lyman "to more favourable lines".
The development came a day after Russian President Vladimir Putin staged a grand ceremony in the Kremlin to celebrate the annexations of four Ukrainian territories.
"I want to say this to the Kyiv regime and its masters in the West: People living in Lugansk, Donetsk, Kherson and Zaporizhzhia are becoming our citizens forever," Putin said.
US President Joe Biden condemned Friday's ceremony in Moscow as a "sham routine" and pledged to continue backing Kyiv.
The four annexed territories create a crucial land corridor between Russia and the Crimean Peninsula, annexed by Moscow in 2014.
Together, the five regions make up around 20 percent of Ukraine, where Kyiv in recent weeks has been clawing back territory.
Civilians gunned down
On Saturday, Ukrainian officials accused Russia of gunning down 24 civilians, including children, in an attack on a road convoy near a recently recaptured town in the eastern Kharkiv region.
Ukrainian troops on Friday had shown AFP reporters a group of vehicles riddled with bullet holes and several corpses in civilian clothes, a short distance east of Kupiansk.
Kyiv also called for the immediate release of the chief of the Moscow-held Zaporizhzhia nuclear power plant, condemning his "illegal detention" by the Russians.
Ihor Murashov was leaving the plant Friday when he was detained and "driven in an unknown direction" while blindfolded, Ukraine's nuclear agency Energoatom said.
Zaporizhzhia -- Europe's largest nuclear energy facility -- has been at the centre of tensions in recent weeks after Moscow and Kyiv accused each other of strikes on and near the plant, raising fears of an atomic disaster.
'Illegal and illegitimate' annexation
Following Friday's annexation, Washington announced "severe" new sanctions against Russian officials and the defence industry, and said G7 allies support imposing "costs" on any nation that backs the annexation.
Ukrainian President Volodymyr Zelensky urged the US-led military alliance NATO to grant his country fast-track membership.
He also vowed never to hold talks with Russia as long as Putin was in power.
NATO chief Jens Stoltenberg slammed the annexation as "illegal and illegitimate" but remained non-committal after Ukraine said it was applying to join the Western alliance.
Turkey said Saturday Russia's annexation was a "grave violation of the established principles of international law".
Despite warnings from Putin prior to the annexation that he could use nuclear weapons to defend the captured territories, Ukraine's Foreign Minister Dmytro Kuleba said Kyiv would "continue liberating our land and our people".
Kuleba also said Ukraine brought the annexations to the International Court of Justice and urged the Hague-based court to hear the case "as soon as possible".
US National Security Advisor Jake Sullivan said Friday that Washington would announce an "immediate" new weapons shipment for Kyiv next week.
Sullivan also said that while there is a "risk" of Putin using nuclear weapons, there was no indication he would do so imminently.