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In its latest update, the MoD said air and artillerystrikes have allowed Russian troops to advance around the city of Lysychansk.
Both Lysychansk and Severodonetsk have witnessed intense fighting over the last few weeks but Ukrainian resistance has managed to block Russian forces in the southeastern district of the former, the MoD said.
The MoD said: “Russian forces continue to achieve minor advances around Lysychansk, with air and artillery strikes continuing in the district.
“Ukrainian forces probably continue to block Russian forces in the south-eastern outskirts of Lysychansk.
“Russia continues to employ air-launched anti-ship missiles in a secondary land attack role, likely because of dwindling stockpiles of more accurate modern weapons.”
Latest Defence Intelligence update on the situation in Ukraine - 2 July 2022
Find out more about the UK government's response: https://t.co/fwzYduGXwf
🇺🇦 #StandWithUkraine 🇺🇦 pic.twitter.com/VTNFQTqnjK
— Ministry of Defence 🇬🇧 (@DefenceHQ) July 2, 2022
Twenty-one people were killed following the attack, including a 12-year-old boy.
Mr Zelensky said: “Three missiles hit an ordinary residential building, a nine-story building in which no one hid any weapons, military equipment, or ammunition, as Russian propagandists and officials always tell about such strikes.
“It was a simple house, about 160 people. It was inhabited by ordinary people, civilians. The recreation centre was also destroyed by this strike - an absolutely typical object for the seaside area.
“I emphasize: this is a deliberate, purposeful Russian terror, not some mistakes or an accidental missile strike.”
The UK Government has also condemned the exploitation of prisoners of war and civilians for political purposes, after two British men were captured by Russian forces and charged with being mercenaries in Ukraine.
Cambridgeshire aid worker Dylan Healy, 22, and military volunteer Andrew Hill have been charged with carrying out “mercenary activities”, officials in the Moscow-backed Donetsk People’s Republic said, according to Russian state media Tass.
The Foreign, Commonwealth and Development Office (FCDO) is understood to be actively investigating and is providing support to the men’s families.
An FCDO spokeswoman said: “We condemn the exploitation of prisoners of war and civilians for political purposes and have raised this with Russia.
“We are in constant contact with the government of Ukraine on their cases and are fully supportive of Ukraine in its efforts to get them released.”