British defence intelligence analysts believe Moscow has established a defensive line between the Oskil River and the town of Svatove following a successful counter-offensive from the Ukrainians, forcing the Kremlin to concede swathes of territory.
The zone is viewed as important partly because it sits along the border of the Luhansk region, part of the Donbas, which Russia has sought to “liberate” as one of its key war aims.
Any substantial loss of territory here would “unambiguously undermine” Vladimir Putin’s strategy for the conflict, the experts say.
It comes as Mr Putin has vowed to press his attack on Ukraine despite that country’s latest counter-offensive.
He also warned that Moscow could ramp up its strikes on vital Ukraine’s infrastructure if Ukrainian forces target facilities in Russia.
Speaking to reporters after attending a summit of the Shanghai Co-operation Organisation in Samarkand, Uzbekistan, Mr Putin said the “liberation” of Ukraine’s entire eastern Donbas region remained Russia’s main military goal and that he saw no need to revise it.
“We aren’t in a rush,” the Russian leader said, adding that Moscow has only deployed volunteer soldiers to fight in Ukraine.
Some hard-line politicians and military bloggers have urged the Kremlin to follow Ukraine’s example and order a broad mobilisation to beef up the ranks, lamenting Russia’s manpower shortage.
In its latest update on the situation in Ukraine, the Ministry of Defence (MoD) said it was unclear whether Russia’s frontline forces had adequate reserves or morale to withstand another concerted Ukrainian assault in eastern parts of the country.
It comes as bodies have been unearthed at a mass burial site near the city of Izium, in the Kharkiv region, which was recently recaptured from Moscow.
Ukrainian president Volodymyr Zelensky said the dead included both children and adults, civilians and military.
“Tortured, shot, killed by shelling,” Mr Zelensky said.
“Even entire families are buried there: Mother, father and daughter.”
Ukrainian MP Lesia Vasylenko said the recapture of Izium was a “huge strategic gain”, militarily speaking.
“Ukraine is making confident advances in the north-east and the south-east of the country as well,” she told Sky News.
“We are making progress for our sake, but also for the sake of bringing back long-standing peace to the continent.”
Asked what she thought Mr Putin might do next, she said: “Nobody can be in the mind of that power-crazed leader.”
She added: “Whatever it is, we have to be prepared for it – we have to be prepared for it as Ukrainians, you have to be prepared for it in the UK.
“And actually, people worldwide need to be prepared that something absolutely atrocious, another crazy move, can happen any time.
“For that, Ukrainians need to have the weapons to protect themselves, the ammunition in the necessary amount to protect themselves.
“And the West needs to be prepared to apply every sanction that there is in the book against Russia.”