Russian forces have taken partial control of a key industrial city in eastern Ukraine, a regional governor said Tuesday, hours after European Union leaders struck a deal to ban more than two-thirds of Moscow's oil imports.

Severodonetsk is one of several urban hubs that lie on Russia's path to capturing the Donbas's Lugansk region, where Moscow has shifted the bulk of its firepower since failing to capture Kyiv in the war's early stages.

"The situation is extremely complicated. Part of Severodonetsk is controlled by the Russians," Lugansk regional governor Sergiy Gaiday said in a statement on social media, adding that Ukrainian troops still retained some areas.

But as Russian troops edged closer to the Severodonetsk city centre, officials in Brussels were tightening the economic screws on Moscow.

A compromise deal reached late Monday, meant to punish Russia for its invasion three months ago, cuts "a huge source of financing for its war machine," European Council chief Charles Michel tweeted.

"Maximum pressure on Russia to end the war," he said.

Leaders of the 27-nation bloc met to negotiate the long-sought deal amid concerns raised by Hungary and other neighboring countries reliant on Russian fuel.

The agreement also includes plans for the EU to send nine billion euros ($9.7 billion) in "immediate liquidity" to Kyiv, Michel announced.

Hours earlier, Ukrainian President Volodymyr Zelensky had called an oil embargo the "key point" to any sanctions package.

"I believe that Europe will have to give up Russian oil and oil products in any case, because this is about the independence of Europeans themselves from (weaponized) Russian energy," he said in his daily address to the nation.

The Netherlands on Tuesday became the latest European country to have its Russian gas shipments halted after refusing to pay in rubles, a demand Moscow is making of "unfriendly countries" in a bid to sidestep crippling Western sanctions.

"Gazprom has completely stopped gas supplies to (Dutch Energy Firm) GasTerra due to non-payment in rubles," the Russian gas giant said in a morning statement.

'Must never happen again'

As Europe announced its new sanctions on Moscow, Washington was taking a cautious line regarding weaponry for Ukraine.

Ukraine has received extensive US military aid, with legislators approving another $40 billion assistance package in May.

But US President Joe Biden said he would not send long-range rocket systems that could hit Russian territory, despite urgent requests from Kyiv for exactly that

"We are not going to send to Ukraine rocket systems that can strike into Russia," Biden told reporters in Washington.

His comments came as new US ambassador to Ukraine Bridget Brink -- filling a position vacant since 2019 -- and French Foreign Minister Catherine Colonna both arrived in Kyiv.

France will "continue to reinforce arms deliveries," Colonna said at a news conference with her Ukrainian counterpart Dmytro Kuleba.

The highest-ranking French official to visit the capital since Russia's invasion began February 24, Colonna also visited Bucha, near Kyiv, where Russian troops have been accused of committing war crimes against civilians.

"This should never have happened," Colonna told reporters after visiting an Orthodox church in the town. "It must never happen again."

Her visit came as a French journalist was killed while working in Ukraine.

Frederic Leclerc-Imhoff was "on board a humanitarian bus" when "he was mortally wounded," French President Emmanuel Macron said on Twitter.

Oil sanctions

Participants in Monday's EU summit hatched a compromise deal that exempts deliveries by pipeline from the oil import ban, after Hungarian President Victor Orban warned halting supplies would wreck the country's economy.

EU chief Ursula von der Leyen said the ban "will effectively cut around 90 percent of oil imports from Russia to the EU by the end of the year".

Michel said the sanctions also involved disconnecting Russia's biggest bank, Sberbank, from the global SWIFT system, banning three state broadcasters and blacklisting individuals blamed for war crimes.

Russia's Gazprom, meanwhile, turned off the tap to the Netherlands on Tuesday, halting gas shipments after Dutch energy firm GasTerra ignored a demand that gas supplied from April 1 be paid for in rubles.

The partly state-owned firm revealed the looming shut-off a day earlier, saying it would not comply with payment requirements that breach EU sanctions.

The cutoff means that two billion cubic meters of gas will not be supplied to the Netherlands between now and October, GasTerra said, adding it had purchased gas elsewhere in anticipation of the move.

Danish energy company Orsted has also warned its gas shipments could be cut off when a Tuesday payment deadline had passed.

Russia has previously halted deliveries to Finland, Bulgaria and Poland, a move blasted by the EU as "blackmail".

• Referendum cancelled -

With Russia facing the oil import ban, a Georgian breakaway region delivered another blow to Moscow's hopes for further unity among local allies, with the leader of South Ossetia scrapping a planned July referendum on joining Russia.

The Moscow-controlled enclave's president, Alan Gagloev, warned Monday about "uncertainty of the legal consequences of the issue submitted to a referendum."

Since failing to capture Kyiv in the war's early stages, Russia's army has narrowed its focus, hammering Donbas cities with relentless artillery and missile barrages.

At least three people were killed and six wounded in an overnight rocket attack on the city of Slovyansk, Donetsk regional governor Pavlo Kirilenko said Tuesday on Telegram.

"I repeat once again that there are no safe places in the Donetsk region, so I call again: evacuate -- save your lives," he said.

But Ukrainian forces have pushed back in the southern region of Kherson, the country's military leadership has said.

On Monday, Ukraine's southern command centre said they had driven Russian troops from the village of Mykolayivka.

A day earlier, the army claimed to have pushed Russian forces into "unfavorable positions" around the villages of Andriyivka, Lozovo and Bilohorka, forcing Moscow to send reserves to the area.