Russia appears to have delivered Ukraine a serious blow in the struggle for the country's east, breaching the defenses around a key city and creating the possibility that Kyiv's troops in the region could be encircled.

With the advance, Russia is now within striking distance of seizing or encircling the final two rebel cities in the province of Luhansk.

These two cities, together with Donetsk, are part of the eastern industrial Donbas, which has grown to be the conflict's focal point.

According to Ukrainian officials and Western military analysts, Russian soldiers have gained ground around Lysychansk in recent days, closing in on the city while fighting for full control of its battle-scarred twin, Sievierodonetsk.

The Ukrainian army reported on Tuesday that Russian troops had captured a number of key villages south of Lysychansk, giving them the ability to bombard the city, which has been heavily shelled for weeks.

This phase of the conflict has been defined by violent artillery exchanges, with Kyiv pleading with the U.S. and its Western partners to send additional heavy firepower to confront Moscow's forces.

Tuesday's daily assessment from the Institute for the Study of War, a U.S. military think tank, described the event as a "clear setback" for Ukraine.

Across the Siverskyi Donets River, Ukrainian and Russian forces have been engaged in a street-to-street struggle for control of Sievierodonetsk for weeks.

On Wednesday, the governor of Luhansk, Serhiy Haidai, declared that despite being restricted to the city's industrial zone, the city's defenders continue to hold out.

Before posing a danger to Lysychansk from the northeast, it was assumed that Russia would have to acquire full control of Sievierodonetsk and then try a perilous river crossing - something it has struggled with in the past - before it could do so.

However, it currently appears to be approaching from the southwest.

According to the Institute for the Study of War, Russian forces "may be able to attack Lysychansk in the coming days."

Geopolitical and security researcher Michael A. Horowitz, head of intelligence at the consultancy Le Beck, said the Kremlin's forces have made a "tactical breakthrough" close to Lysychansk.

The Russian army has overrun certain Ukrainian lines and is advancing towards Lysychansk, he claimed. 

"In the coming days or weeks, the Ukrainian military may have to make some painful decisions despite mounting a valiant defense of the region," he added.