The Ukrainian city of Bakhmut has fallen and is now completely controlled by Russia’s forces, the leader of the Wagner private military company, Evgeny Prigozhin, claimed in a video posted on social media.

A statement from the Kremlin said: "Vladimir Putin congratulated the assault units of Wagner as well as all servicemen of units of the Russian armed forces who provided them with the necessary support and flank cover, on the completion of the operation to liberate Artyomovsk [the Russian name for Bakhmut]."

The Russian defence ministry added: “In the Artyomovsk tactical direction, the assault teams of the Wagner private military company with the support of artillery and aviation of the southern battlegroup has completed the liberation of the city of Artyomovsk.”  

In televised comments, Ukraine's President Volodymyr Zelenskiy said that Bakhmut has been "completely destroyed” and suggested that the city has been lost.

"It's a pity, it's a tragedy, but for today Bakhmut is only in our hearts,"  said Zelenskiy, who is attending the G7 meeting in Hiroshima. However, a spokesman denied that the president had admitted defeat in the eight-month-long battle, the longest in the war. Ukraine’s military authorities said that their forces were still in the city and the battle is ongoing.

Prigozhin released a video of himself, flanked by Wagner soldiers, holding a flag in what he claims is the centre of Bakhmut. Prigozhin claims his forces took complete control of the city at midday on May 20. He spoke with ruined buildings in the background and the sound of explosions in the distance.

Following Prigozhin's announcement, Russian President Vladimir Putin conveyed his congratulations to the Wagner forces. Russia’s Russian Defence Minister Sergei Shoigu also offered Prigozhin congratulations on the reported victory. Putin promised all the soldiers that had participated in the campaign would receive awards.

However, the situation remains confused, as Ukraine’s military deny they have lost control of the symbolically important city in the Donbas region of eastern Ukraine.

Military analysts say that Bakhmut is of little strategic importance, but it has become a potent symbol in the fight between Moscow and Kyiv. Earlier Zelenskiy said that if Ukraine lost the city he might be forced to start peace talks by both his international partners and the Ukrainian people.

The toll of the conflict has been devastating. Western officials estimate that between 20,000 and 30,000 Russian troops have been killed or wounded in Bakhmut, while Ukraine's military has also paid a heavy price. The once-thriving city now lies in ruins, with hardly any buildings left standing, and most of its population has fled.

Bakhmut, known as a "fortress" of Ukrainian morale, has been a crucial propaganda battleground for both sides. Ukraine's hope lies in the belief that the protracted battle has depleted Russia's army and resources, leading to potential vulnerabilities, whereas the Russians have followed the same strategy of using up Ukraine’s dwindling reserves of artillery shells and losing some of their most experienced troops and commanders.

Notably it has been the Wagner forces that have spearheaded the bloody battle that is mostly comprised of convicts who have been used as cannon fodder, whereas Ukraine has brought up experienced reserves to defend the city. Although the killed in action (KIA) ratio has been estimated at five Russian dead to each Ukrainian, military analysts have said that the veterans that Ukraine has lost in the battle are more valuable than the inexperienced and reluctant Russian convicts that have been sent by Wagner against them.

The victory is also a bonus for Prigozhin, who has frequently criticised the Russian defence ministry for inadequately supplying his fighters. Prigozhin is thought to have political ambitions and the prestige of a victory in Bakhmut will increase his sway. In a recent video, Prigozhin asserted, "No one can pedantically reproach us for the fact that at least some piece was not taken."

Prigozhin says that Wagner troops will withdraw from the city later this month for a period of rest, handing over control to regular Russian troops.

Confusion still reigns over the actual state of the fighting in the city, with conflicting claims from both sides. The Ukrainian authorities have denied that the battle is over and insist that their forces are still fighting.

Serhiy Cherevatyi, spokesman for Ukraine’s eastern command, responded in comments to the Associated Press, saying Prigozhin’s claim “is not true. Our units are fighting in Bakhmut.” The Ukrainian General Staff also said that “heavy battles for the city of Bakhmut do not stop,” in comments posted on Facebook.

Russia’s defence ministry released a statement on the Telegram channel about eight hours after the video released by the Wagner head Prigozhin.

As an update to enhanced Western support, the US has announced a new $375mn military aid package for Ukraine. In particular, it includes additional ammunition for HIMARS rocket launchers, artillery rounds and Javelin anti-tank missiles.

Earlier US President Joe Biden authorised Western allies to give advanced F-16 fighter jets to the embattled nation. Biden has also endorsed the training of Ukrainian pilots to fly the warplanes, according to officials.

The timing for when Kyiv will receive the aircraft, how many will be delivered and which countries will provide them remains unclear. A US official stressed the F-16s will not be used for an upcoming counter-offensive against Russia.