In what has to be an awkward moment for Putin, Russia has pulled its troops out of Lyman, a city in Donetsk that is a key logistics hub for Russian forces.

"In connection with the creation of a threat of encirclement, the allied troops were withdrawn from the settlement of Krasny Liman to more advantageous lines," Konashenkov said.

Coming just days after Russia annexed the surrounding territory, how this looks to Russian civilians is anyone's guess.

Western media, of course, is having a field day with it.

But Putin’s high-stakes strategy appeared to be unravelling on the battlefield. Russian nationalist bloggers vented their fury at the military command in Moscow, while Chechnya’s president, Ramzan Kadyrov, published a scathing critique of its many failures.

Russia is losing ground and losing the initiative in Ukraine.