Kyiv's forces may have to retreat from the eastern city of Severodonetsk, a senior Ukrainian official conceded on Wednesday, as diplomatic efforts intensified to unblock grain stuck in Ukraine's ports.
The strategic city has become the focus of Russia's offensive as it seeks to seize an eastern swathe of Ukraine, after being repelled from other parts of the country.
Moscow claimed on Tuesday they had full control of residential areas while Kyiv was still holding the industrial zone and surrounding settlements, but Ukrainian officials insisted the Russians were not in control of the city.
On Wednesday, Sergiy Gaiday -- governor of the Lugansk region, which includes the city -- said Ukraine's forces might have to pull back as Severodonetsk is being shelled by Russian troops "24 hours a day".
"It is possible that we will have to retreat" to better fortified positions, he said in an interview on the TV channel 1+1.
In his daily address late Tuesday, Ukrainian President Volodymyr Zelensky had struck a defiant tone: "The absolutely heroic defence of Donbas continues."
Russia's offensive is now targeting the Donbas region, which includes Lugansk and Donetsk, after its forces were pushed back from Kyiv and other areas following the February invasion.
The cities of Severodonetsk and Lysychansk, which are separated by a river, are the last areas still under Ukrainian control in Lugansk.
As concerns mounted over grain trapped at Ukrainian ports, Russian Foreign Minister Sergei Lavrov said Moscow was ready to ensure the safe passage of ships from Ukraine.
"We are ready to do this in cooperation with our Turkish colleagues," Lavrov told reporters in Ankara amid stark warnings of shortages worldwide partly blamed on Russia's invasion of Ukraine.
His Turkish counterpart Mevlut Cavusoglu called Russian demands for an end to sanctions to help grain onto the world market "legitimate".
"If we need to open up the international market to Ukrainian grain, we see the removal of obstacles standing in the way of Russia's exports as a legitimate demand," he said.
But Ukraine said on Wednesday it would not demine waters around the Black Sea port of Odessa to allow grain exports, citing the threat of Russian attacks on the city.
At the request of the United Nations, Turkey has offered its services to escort maritime convoys from Ukrainian ports, despite the presence of mines -- some of which have been detected near the Turkish coast.
Both sides accuse one another of destroying agricultural areas, which could worsen global food shortages.
As he hosted Mediterranean ministers on the global food crisis, Italian Foreign Minister Luigi Di Maio warned "millions" could die unless Russia unblocked Ukraine's ports.
The war's economic impact continued to reverberate, with the World Bank cutting its global growth estimate to 2.9 percent -- 1.2 percentage points below the January forecast -- due largely to the invasion.
The toxic combination of weak growth and rising prices could trigger widespread suffering in dozens of poorer countries still struggling to recover from the upheaval of the Covid-19 pandemic, the bank said.
"The risk from stagflation is considerable with potentially destabilising consequences for low- and middle-income economies," World Bank President David Malpass told reporters.
"For many countries recession will be hard to avoid," Malpass said.
The bank additionally announced $1.5 billion more in aid for Ukraine, bringing the total planned support package to more than $4 billion.
The OECD also warned the world economy would pay a "hefty price" for the Russian invasion as it slashed its 2022 growth forecast and projected higher inflation.
Severodonetsk appeared close to being captured just days ago but Ukrainian forces launched counterattacks and managed to hold out, despite warnings they are outnumbered by superior forces.
Lanny Davis, a US lawyer for Ukraine tycoon Dmytro Firtash, said 800 civilians had taken refuge in the bunkers inside Firtash's huge Azot chemical plant in the city.
The situation was also increasingly desperate in Lysychansk.
"Every day there are bombings and every day something burns. A house, a flat... And there is nobody to help me," 70-year-old Yuriy Krasnikov told AFP.
"I tried to go to the city authorities, but nobody's there, everyone has run away."
Ivan Sosnin was among some residents who decided to stay despite the war.
"This is our home, that's all we know. We grew up here, where else should we go?" said the 19-year-old.
The leader of Ukraine's pro-Russian separatists in Donetsk, Denis Pushilin, on Tuesday confirmed the death of another Russian general in the fighting.
Pushilin expressed on Telegram his "sincere condolences to the family and friends" of Major General Roman Kutuzov, "who showed by example how to serve the fatherland".
Ukraine's forces have claimed to have killed several of Russia's top brass but their exact number is not known as Moscow is tight-lipped on losses.
On Tuesday, Zelensky announced the launch next week of a "Book of Torturers", a system that will collect details of alleged war crimes and Russian soldiers accused of committing them.
"I have repeatedly stressed that they will all be held accountable. And we are approaching this step by step," he said.
"Everyone will be brought to justice."
Smoke and dirt rise from shelling in the city of Severodonetsk during fight between Ukrainian and Russian troops in the eastern Ukrainian region of Donbas. AFP