Russia has "absolutely lost the momentum" in Ukraine but President Vladimir Putin must not be underestimated, the head of the NATO military alliance has told Sky News.
Jens Stoltenberg was speaking after Moscow ordered its troops to withdraw from the key southern city of Kherson, under fire from Ukrainian forces, in a significant setback.
He described the announcement as "encouraging" and said it demonstrated how Ukraine's military, backed by western weapons, was putting Russian troops under pressure.
But the NATO secretary general said it was too soon to draw any conclusions about the significance or otherwise of events in Kherson.
"We have to wait and see what's actually going to happen," Mr Stoltenberg said in an interview on Wednesday during a trip to London, where he met with Prime Minister Rishi Sunak.
"It's part of an overall pattern or picture we have seen over the last months that Russia has absolutely lost the momentum. They have been forced to give up territory.
"But we should not underestimate Russia. They still have the capabilities, they still have the forces and they also have forces and capabilities that can strike Ukrainian cities… So it shows that Russia can still inflict a lot of damage on Ukraine."
Asked about an exclusive report by Sky News that Russia has allegedly given Iran captured British and US weapons and cash in return for deadly drones to be used against Ukraine, Mr Stoltenberg said that he could not confirm the allegations.
"What I can say is that what we see is that Iran is supporting Russia," he said.
"They have delivered these drones and that's actually Iran supporting an illegal war by Russia, a war of aggression against Ukraine."
A security source told Sky News there was a concern Iran would seek to reverse engineer the captured western weapons received from Russia.
The NATO chief reiterated he could not confirm whether this was the case, but said: "Of course, we are concerned when we see totalitarian, authoritarian regimes - as the regime in Iran, which is investing heavily in new missiles and having the nuclear programme - that they are working more and more closely with Russia.
"That just highlights the danger of this war."
Mr Stoltenberg said, at some point, talks would likely be needed to resolve the Ukraine war.
"At some stage, most likely, this war will end at the negotiating table. But we know that what Ukraine can achieve around that table is absolutely linked to the strength on the battlefield."