KYIV, Ukraine (AP) — Russia on Sunday claimed its troops had captured a strategically important town in eastern Ukraine as part of a grinding campaign to weaken Kyiv’s grip on the country’s industrial heartland, while uncertainty over the continued flow of U.S. funding has reportedly halted the work of some Ukrainian NGOs, including those helping war veterans.

Russia’s Defense Ministry announced the fall of Velyka Novosilka, which had around 5,000 residents before the war, following a monthslong battle. Its statement could not be independently verified, and Ukraine claimed its troops had only strategically withdrawn from certain areas.

But if confirmed, it would make Velyka Novosilka the first significant town to capitulate in 2025 under Moscow’s onslaught in the eastern Donetsk region against Ukraine’s weary and short-handed army. The war is set to reach its three-year milestone in February.

Ukrainian forces withdrew from certain parts of Velyka Novosilka to avoid encirclement, the 110th Separate Mechanized Brigade said in a statement on its official Telegram channel Sunday. The brigade is active in that patch of the frontline.

Analysts have long predicted that it’s only a matter of time until Russian forces capture the settlement, which lies only 15 kilometers (9 miles) from the neighboring Dnipropetrovsk region.

The brigade said though they have approximate parity with Russian forces in terms of artillery and drones, the Russians have a huge advantage in manpower.

“Our units, using the weather conditions, skillfully withdrew from areas where there was a threat of encirclement. This does not mean that we have completely left the city, the fighting in Velyka Novosilka continues . All actions are aimed at minimizing our own losses and maximum damage to the enemy,” the statement said.

The brigade said the withdrawal will make it topographically difficult for Russians to advance by making the river an obstacle for further advance.

“The enemy (…) will have no peace, any movement is cut off by shells and drones,” the statement said.

Russia captured the Donetsk cities of Avdiivka and Vuhledar last year after long and grueling battles. Those cities were largely leveled by Russian artillery, glide bombs and drones before they fell.

Russian forces have also been trying for months to capture the key Donetsk strongholds of Pokrovsk and Chasiv Yar.

Elsewhere, Ukrainian NGOs catering to the needs of war veterans and their families have claimed a suspension of U.S. funding is forcing them to halt their work, days after newly sworn in U.S. Secretary of State Marco Rubio announced he would pause foreign aid grants for 90 days.

Ukrainian President Volodymyr Zelenskyy later claimed that military aid to Ukraine would continue, but did not clarify whether humanitarian aid had been paused. Kyiv relies on the U.S. for 40% of its military needs.

According to news reports, Ukrainian NGOs receiving funding from Washington this weekend began receiving “stop work” orders, requiring them to pause all projects and related travel.

Veteran Hub, an NGO that provides legal and psychological support to war veterans and their families, was forced to halt operations of two of its three largest service units as a result, the organization said in its official Facebook page.

It said the suspension has lead it to ask for public donations for the first time.

“Since 2018, we have refrained from public fundraising because we believe that donations are primarily needed for the military. Today, we are forced to publicly ask for support for the first time,” the organization said.

With the Trump administration questioning the future of U.S. aid to Ukraine, stressing the need to quickly broker a peace deal, both Moscow and Kyiv are seeking battlefield successes to strengthen their negotiating positions ahead of any prospective talks.

For the past year, Russian forces have been waging an intense campaign to punch holes in Ukraine’s defenses in the eastern Donetsk region. The sustained and costly offensive has compelled Kyiv to give up a series of towns, villages and hamlets.