Bakhmut has been reduced to a blasted wasteland, with a few thousand of its population still living inside as armies battle street-by-street.
Russia accused Ukraine of facilitating cross border attacks the Kremlin described as a terrorism.
The West promises tanks and armoured vehicles to Ukraine the coming months.
Ukrainian forces hung on to positions in the ruined eastern city of Bakhmut on Thursday, while Moscow said its security forces were battling Ukrainian saboteurs who had taken hostages in a cross-border raid.
Moscow said a group of armed Ukrainians had crossed into Russia's Bryansk province, fired on a car killing a civilian, and were holding hostages in a shop near the border.
An aide to Ukrainian President Volodymyr Zelensky called the reports a provocation by Moscow, but also implied some form of attack had indeed been carried out, blaming Russian partisans.
Near the front lines west of Bakhmut, in the Ukrainian-held town of Chasiv Yar, Reuters heard the thump of outgoing artillery fire on Thursday morning.
In nearby towns and villages, fresh trenches had been dug on the roadside 20-40 meters (65-130 feet) apart, an apparent sign that Ukrainian forces were strengthening their defensive positions west of the city.
Bakhmut itself has been reduced to a blasted wasteland, with a few thousand of its 70,000 pre-war civilian population still living inside as armies battle street-by-street.
Russian troops, bolstered by hundreds of thousands of reservists called up last year, have been advancing north and south of the city, trying to cut off the remaining routes in and out to the west used by the Ukrainian garrison.
The Bakhmut ‘saga’
Russia's Wagner private army boss, Yevgeny Prigozhin, released video of his men lifting a Wagner banner atop a semi-ruined multi-storey building, which he said had been filmed near the centre of Bakhmut. Reuters was not able to verify the location of the footage.
Moscow, which lost territory throughout the second half of 2022, says taking Bakhmut would be a step towards seizing the rest of the surrounding Donbas region a major aim. Kyiv says the city has limited strategic value, but it is determined to hold it to exhaust Russia's invasion force in what has become the bloodiest battle of the war.
"Sooner or later, we will probably have to leave Bakhmut. There is no sense in holding it at any cost," Ukrainian member of parliament Serhiy Rakhmanin said late on Wednesday.
"But for the moment, Bakhmut will be defended with several aims - firstly, to inflict as many Russian losses as possible."
Russia-Ukraine wargames
Russia said an armed group of Ukrainians had crossed the border into the Bryansk region to carry out what the Kremlin described as a terrorist attack.
"Today, a Ukrainian sabotage and reconnaissance group penetrated the Klimovsky District in the village of Lubechanye," Bryansk Governor Alexander Bogomaz said on his Telegram channel. "Saboteurs fired on a moving car. As a result of the attack, one resident was killed, and a 10-year-old child was wounded."
Russia's RIA state news agency said several people had been taken hostage in a store in Lubechanye, less than a kilometre from Russia's border with Ukraine.
Zelensky aide Mykhailo Podolyak called the Russian reports "a classic deliberate provocation".
“Moscow wants to scare its people to justify the attack on another country & the growing poverty after the year of war," he tweeted. But he also implied an attack was indeed under way, carried out by partisans within Russia.
Moscow has accused Ukraine of staging a series of drone attacks on targets deep within Russia this week. Kyiv typically declines official comment on such reports.
Russian missiles crashed into a five-story apartment block in the southern city of Zaporizhzia overnight, collapsing upper floors in the centre of the building.
As dawn broke, Reuters saw rescue workers carry the body of a man out of the wreckage. Police said at least four people had been killed. Evacuated residents, in shock, were being kept warm aboard a bus while crews tried to clear the debris.
"The people were screaming from under the rubble," resident Yuliia Kharytenko, 36, told Reuters. "We ran out in whatever we were wearing. Our cat is left there, scared. We don't know if it is alive."
An international team of war crimes investigators said on Thursday that the Russian State had funded and operated a network of at least 20 torture chambers during its eight-month occupation of Kherson, recaptured last year by Ukrainian forces.
Russia’s aim
Russia's aim was to "subjugate, re-educate or kill Ukrainian civic leaders and ordinary dissenters", the team said.
Moscow has denied abusing civilians in occupied areas and intentionally targeting them in attacks. The Kremlin did not immediately respond to a Reuters request for comment.
Russian forces are under pressure to secure advances now, before warmer weather brings the region's season of sucking black mud - "bezdorizhzhia" in Ukrainian, "raputitsa" in Russian - legendary in military history for destroying armies attempting to attack across Ukraine and western Russia.
Kyiv, for its part, is focusing on defence for now, planning a counteroffensive later this year to recapture the nearly one-fifth of the country occupied by Russian troops.
The West has promised Ukraine new weapons, including tanks and armoured vehicles worth billions of dollars, expected in coming months when the mud will again be dry.
Apart from the vicinity of Bakhmut, Russia has achieved little in its winter offensive, with notable costly failures, especially to the south at Vuhledar. Western countries and Russian pro-war bloggers say brigades of Russian marines were decimated. In addition, scores of tanks and armoured vehicles were destroyed in failed attempts to storm a Ukrainian bastion there in February.
The war has dominated a foreign ministers' G20 meeting in New Delhi, one of the last international forums involving top Western officials where Russia is still invited. U.S. and European delegates are pushing for a statement that will contain condemnation of the war.
"Unfortunately, this meeting has again been marred by Russia's unprovoked and unjustified war against Ukraine, deliberate campaign of destruction against civilian targets, and its attack on the core principles of the UN Charter," U.S. Secretary of State Antony Blinken said.