Russia said it had broken through two fortified defense lines in Ukraine's east, while Western allies pledged to ramp up military aid to better arm Kyiv as it prepares for a counter-offensive.
Bolstered by tens of thousands of reservists drafted in December, Russia has intensified attacks across southern and eastern Ukraine in recent weeks, and a major new offensive is widely expected as the first anniversary of its invasion nears.
"The situation is tense. But our fighters are not allowing the enemy to achieve their goals and are inflicting very serious losses,"
Ukrainian Deputy Defense Minister Hanna Malyar
"The enemy's offensive continues in the east, (with) round-the-clock attacks," Ukrainian Deputy Defense Minister Hanna Malyar said.
"The situation is tense. But our fighters are not allowing the enemy to achieve their goals and are inflicting very serious losses," she wrote on the Telegram messaging app on Wednesday.
Earlier, the Russian Defense Ministry said Ukrainian forces had retreated in the face of Russian operations in the Luhansk region, although it gave no details and Reuters was not able to verify this and other battlefield reports.
"During the offensive ... the Ukrainian troops randomly retreated to a distance of up to 3 km (2 miles) from the previously occupied lines," the ministry said on Telegram.
"Even the more fortified second line of defense of the enemy could not hold the breakthrough of the Russian military."
The ministry did not specify in which part of Luhansk the offensive took place. The Luhansk and Donetsk regions make up the Donbas, Ukraine's industrial heartland, now partially occupied by Russia which wants full control.
In Kyiv, the capital's military administration said six Russian balloons that may have contained reconnaissance equipment were shot down after air raid sirens blared.
"The purpose of launching the balloons was possible to detect and exhaust our air defenses," it said on the Telegram messaging app. Russia did not immediately comment.
Bakhmut attacks
Russia's main effort has been an artillery and ground onslaught on the city of Bakhmut, in Donetsk.
Russian forces have launched attacks on several settlements, including Paraskoviivka on the northern approaches to Bakhmut, over the past day, Ukrainian military analyst Oleh Zhdanov said.
Russian attempts to advance on two other settlements north of Bakhmut were repelled, he added in a YouTube video.
"Things are very difficult for our forces there as Russian troops are being sent into the area en masse," Zhdanov said.
Maksym Zhorin, a military analyst and former commander, told Ukrainian Radio NV that the Russians were attacking Opytne and Klishchiivka, villages on the southern approach to Bakhmut.
There was also heavy fighting in Krasna Hora, to the north of Bakhmut, where the Ukrainians had suffered losses, he added.
"The city can be supplied and the injured can be evacuated. We can maintain our defense for a long time yet," he said.
The General Staff of the Ukrainian Armed Forces, in its evening report, said Russian forces had fired on more than 15 towns and villages near Bakhmut, including the city itself.
Donetsk regional Governor Pavlo Kyrylenko posted pictures and video of an apartment building littered with rubble that he said was destroyed in the city of Pokrovsk, southwest of Bakhmut, killing three people.
Bakhmut's capture would give Russia a stepping stone to advance on two bigger cities, Kramatorsk and Sloviansk further west in Donetsk, which would revive Moscow's momentum ahead of the Feb. 24 anniversary of the invasion.
Military equipment
NATO countries are ramping up production of artillery munitions as Ukraine is burning through shells faster than allies can make them, the alliance said.
"Things are happening, but ... we need to step up even more because there is a big need out there to provide Ukraine with ammunition," NATO chief Jens Stoltenberg told reporters after a two-day meeting of alliance defense ministers in Brussels.
Ukraine has received billions of dollars in military aid, with the United States committing more than $27.4 billion in security assistance since the conflict began.
European Union foreign policy chief Josep Borrell urged countries to join Germany in sending tanks.
Britain said it and other European nations would provide military equipment including spare parts for tanks and artillery ammunition via an international fund, with an initial package worth more than $241 million.
US Defense Secretary Lloyd Austin said Ukraine had a very good chance of taking and "exploiting" the initiative on the battlefield this year.
Russia calls the invasion a "special military operation" against security threats and has cast deliveries of heavy weapons to Ukraine as proof that the West is escalating the war.
Kyiv and its allies call Russia's actions a land grab.
Senior US officials have previously advised Ukraine to hold off with a major offensive until the latest supply of US weaponry was in place and training had been provided.
"We have to ensure that this spring it is truly felt that Ukraine is moving towards victory," Ukraine's President Volodymyr Zelenskiy said in an evening address.