Separatists in eastern Ukraine have captured a strategic transport hub from government forces, putting huge pressure on Kiev's leaders but apparently giving another lease of life to an embattled ceasefire plan.
Ukrainian troops withdrew from Debaltseve in some disarray, but beleaguered president Petro Poroshenko insisted the retreat was "organised and planned" and did not represent another humiliating military failure.
Some soldiers said they had walked for hours across fields to escape Debaltseve, while others had to abandon vehicles that broke down or ran out of fuel.
Kiev and western allies say Russian troops fought alongside Russian volunteers and local insurgents at Debaltseve – a claim denied by Kremlin leader Vladimir Putin, who portrayed the rebels as a rag-tag band of "miners and tractor drivers".
Meeting soldiers who had pulled out of Debaltseve, Mr Poroshenko praised them for helping to “show the whole world the real face of the bandit-separatists supported by Russia”.
As the rebels raised their flag over Debaltseve, separatist commander Eduard Basurin said that a ceasefire agreed last week in Minsk gave them control of Debaltseve, and now – with the town secured – they were ready for a truce.
“We’re not attacking anyone,” said Mr Basurin. “We demand strict compliance with the Minsk agreements.”
Ahead of the anniversary of the bloody climax of last year's revolution in Ukraine, Mr Poroshenko is under huge domestic pressure to strike back somehow against the rebels and Russia for the bloody loss of Debaltseve.
Washington and some EU countries have threatened to tighten sanctions on Moscow, but other EU states have no appetite for further action against Russia, and western powers seem intent on re-launching a ceasefire deal that many Ukrainians denounce.
Mr Poroshenko and Mr Putin are due to hold a conference call with the German and French leaders, who brokered the Minsk pact.
“The leaders want to push ahead with support and implementation of this accord,” said French government spokesman Stephane Le Foll.
EU foreign policy chief Federica Mogherini said the militants were acting "in clear violation of the ceasefire" but should now start to "fully implement the commitments agreed to in Minsk".