Russia gave holdout Ukrainian soldiers an ultimatum on Sunday to lay down arms in the pulverised southeastern port of Mariupol which Moscow said its forces nearly completely controlled in what would be its biggest capture of the nearly two-month war.

Several hours after the 0300 GMT deadline there was no sign of compliance by Ukrainian fighters holed up in the vast Azovstal steelworks overlooking the Sea of Azov.

Having failed to overcome Ukrainian resistance in the north since President Vladimir Putin's Feb. 24 invasion, the Russian military has refocused on the eastern Donbas region where Mariupol is the main port.

The Russian Defence Ministry said its troops had cleared the urban area of Mariupol, which has seen some of the fiercest fighting and worst civilian suffering with bodies littering streets and thousands hunkered down in atrocious conditions underground.

The steelworks, one of Europe's biggest metallurgical plants with a maze of rail tracks and blast furnaces, has become a last stand for the outnumbered defenders.

"The Russian Armed Forces offer the militants of nationalist battalions and foreign mercenaries from 06:00 (Moscow time) on April 17, 2022, to stop any hostilities and lay down their arms," the defence ministry said in a statement.

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"All who lay down their arms are guaranteed that their lives will be spared," it said, offering the defending "remnants" a four-hour window to leave the plant without arms or ammunition.

There was no immediate response from Kyiv to the ultimatum, though Ukraine's military said Russian air strikes on Mariupol continued along with assault operations near the port.

Twisted steel, blasted concrete

In Mariupol, Reuters journalists reached the giant Illich steelworks, one of two metals plants where defenders had held out in underground tunnels and bunkers. Moscow claimed to have captured it on Friday.

The factory was reduced to a ruin of twisted steel and blasted concrete, with no sign of defenders present. Several bodies of civilians lay scattered on nearby streets.

The Russian defence ministry said its troops had "completely cleared" Mariupol's urban area of Ukrainian forces and blockaded the "remnants" in the Azovstal steelworks, RIA news agency said. It said that as of Saturday, Ukrainian forces in the city had lost more than 4000 personnel.

Zelensky accused Russia of "deliberately trying to destroy everyone" in Mariupol and said his government was in touch with the defenders. He did not address Moscow's claim that Ukrainian forces were no longer in urban districts.

He said also that "extermination" of the fighters in Mariupol would put an end to any form of negotiations with Russia.

Russia had said on Friday it would intensify long-range strikes in retaliation for unspecified acts of "sabotage" and "terrorism", hours after it confirmed the sinking of its Black Sea flagship, the Moskva.

Kyiv and Washington say the ship, whose sinking has become a symbol of Ukrainian defiance, was hit by Ukrainian missiles. Moscow says it sank after a fire and its crew of around 500 were evacuated.

Russia's Defence Ministry published video of the head of the navy, Admiral Nikolai Yevmenov, meeting on a parade ground with about a hundred sailors it said were members of the crew.

Russia hopes for biggest victory yet

If Mariupol falls it would be Russia's biggest prize of the war so far. It is the main port of the Donbas, a region of two provinces in the southeast which Moscow demands be fully ceded to separatists.

Ukraine says it has so far held off Russian advances elsewhere in the Donbas regions of Donetsk and Luhansk, where at least one person was killed in shelling overnight.

Ukraine gained the upper hand in the early phase of a war, in part by successfully deploying mobile units armed with anti-tank missiles supplied by the West against Russian armoured convoys confined to roads by muddy terrain.

But Putin appears determined to capture more Donbas territory to claim victory in a war that has left Russia subject to increasingly punitive Western sanctions and with few allies.

The European Union's forthcoming round of sanctions on Russia will target banks, including Sberbank, as well as oil, the head of the European Commission Ursula von der Leyen told the German newspaper Bild am Sonntag.