TOP HEADLINES

● Russia needs huge financial resources for military operations in Ukraine, says finance minister Anton Siluanov, putting the amount of budget stimulus for the economy at 8 trillion rubles ($120 billion).

● Ukrainian forces are engaged in a "fierce defense" of the eastern city of Sievierodonetsk, which is two-thirds surrounded by Russian forces and 90 per cent destroyed by shelling, the Luhansk region's governor said. 

● Russian forces in eastern Ukraine have captured the center of the railway hub town of Lyman and encircled most of Sievierodonetsk, Ukrainian officials confirmed. 

● Ukraine's second city Kharkiv reeled from a deadly onslaught of Russian shelling on Friday as Moscow pressed its offensive to capture key points in the eastern Donbas region with more bombing of residential areas. 

● Moscow-backed forces in Ukraine said they had captured the important battlefield town of Lyman, a strategic point that sits on a road leading to key eastern cities still under Kyiv's control. Ukraine appeared to concede it, as Moscow pressed its biggest advance for weeks.

● Ukraine's President Volodymyr Zelenskyy accused Moscow of carrying out a "genocide" in the eastern region of Donbas, where the city of Severodonetsk is suffering an onslaught of Russian shelling.

● Zelenskyy said Ukraine was not eager to talk to Russian President Vladimir Putin but that it has to face the reality that this will likely be necessary to end the war.

● Russia made an all-out effort to capture the rest of the industrial region of Luhansk in eastern Ukraine on Thursday, officials said.

● Russia said it was looking to ramp up its production of grain to export in the coming season, amid a global food crisis exacerbated by Moscow's military campaign in Ukraine. 

● A Ukrainian official says Russian troops occupying Mariupol have canceled school summer holidays in the southeastern port city to prepare pupils for switching to a Russian curriculum. "The occupiers have announced the extension of the school year until September 1," city official Petro Andryushchenko wrote on social media.

● Russia's foreign minister Sergei Lavrov dismissed a plan for peace in Ukraine proposed by Italy. Lavrov told Russia's RT television channel that the plan envisages that annexed Crimea and regions controlled by pro-Moscow separatists in eastern Ukraine "will be part of Ukraine with broad autonomy." Lavrov said: "Serious politicians... don't propose things like that," in an apparent reference to his Italian counterpart Luigi Di Maio. 

IN DETAIL

UK PM Johnson on Russia's eastern progress

Russian President Vladimir Putin is making slow but palpable progress in the Donbas in east Ukraine, British Prime Minister Boris Johnson said on Friday.

"I'm afraid that Putin, at great cost to himself and to the Russian military, is continuing to chew through ground in Donbas," he told Bloomberg UK.

"He's continuing to make it gradual, slow but I'm afraid it's palpable.”

He continued: "Therefore it is absolutely vital that we continue to support the Ukrainians militarily."

Johnson went on to discuss Ukraine's need for more military support, including multiple-launch rocket systems.

'Shelling without pause'

Ukraine's President Volodymyr Zelenskyy accused Moscow of carrying out a "genocide" in the eastern region of Donbas, where the city of Severodonetsk is suffering an onslaught of Russian shelling.

In his daily televised address, Zelenskyy condemned Moscow's sustained assault on the Donbas, where it has redirected its forces after having failed to capture Kyiv, adding that its bombardment could leave the entire region "uninhabited".

"All this, including the deportation of our people and the mass killings of civilians, is an obvious policy of genocide pursued by Russia," he said.

Pro-Moscow separatist groups have since 2014 controlled parts of Donbas, but Russia now appears set on taking the whole region.

Russian forces are closing in on several cities, including the strategically located Severodonetsk and Lysychansk, which stand on the crucial route to Ukraine's eastern administrative centre in Kramatorsk.

Three people died in attacks on those two cities, Kyiv's Deputy Defense Minister Ganna Malyar told journalists, saying that fighting in the east has reached "its maximum intensity" since the conflict began on February 24.

"The situation remains difficult, because the Russian army has thrown all its forces at taking the Luhansk region," regional governor Sergiy Gaiday said in a video on Telegram. 

"Extremely fierce fighting is taking place on the outskirts of Severodonetsk. They are simply destroying the city, they are shelling it every day, shelling without pause."