Published by Global Banking and Finance Review
Posted on January 22, 2026
5 min readLast updated: January 22, 2026

Published by Global Banking and Finance Review
Posted on January 22, 2026
5 min readLast updated: January 22, 2026

Donetsk's strategic importance makes it a key issue in Ukraine-Russia peace talks, with military, economic, and political stakes for both nations.
By Andrew Osborn
MOSCOW, Jan 22 (Reuters) - U.S. Special Envoy Steve Witkoff said on Thursday that just one issue remained to be resolved before a deal to end the war in Ukraine could be reached.
Witkoff, who was due in Moscow later on Thursday for talks with Russian President Vladimir Putin, did not name the issue. But Washington, Moscow and Kyiv have all made clear that the question is over territory.
The sticking point regards Putin's claim to all of Ukraine's eastern region of Donetsk. Ukrainian forces still hold about 20%, or 5,000 square km (1,900 square miles) of it, despite Russian advances on the battlefield.
Moscow wants Ukrainian forces to withdraw from Donetsk, something Kyiv refuses to do.
Donetsk is one of four Ukrainian regions that Moscow said in 2022 it was annexing after referendums rejected by Kyiv and Western nations as a sham.
Most countries recognise Donetsk as part of Ukraine. Putin says Donetsk and neighbouring Luhansk - which together form the Donbas region - are part of Russia's "historical lands".
WHAT IS THE MILITARY IMPORTANCE OF DONETSK?
The part of Donetsk still held by Kyiv includes Sloviansk and Kramatorsk, "fortress cities" that are part of a heavily fortified line of defences, including trenches, anti-tank obstacles, bunkers and minefields that are located around them.
Kyiv views the cities as vital to its defence of the rest of Ukraine as the land west of Donetsk is much flatter, making it easier for Russia to advance and take territory on the eastern bank of the River Dnipro.
Ukrainian President Volodymyr Zelenskiy says surrendering full control of Donetsk would give Russia a platform to launch assaults deeper into Ukraine. He fears Russia would re-arm after any peace deal and at some point use Donetsk to sweep westwards.
HOW DO RUSSIANS AND UKRAINIANS REGARD DONETSK?
Both sides have suffered heavy casualties and expended vast amounts of money and equipment fighting over Donetsk, including for the city of Bakhmut, where Russia threw tens of thousands of soldiers into what became known as a meat grinder.
These losses have made it harder for either side to compromise.
Ukraine does not want to gift territory that Russia has failed to win on the battlefield.
Western military analysts say it could take Russia at least another year of fighting to take the rest of Donetsk, assuming a constant rate of advance.
Russian commanders are more bullish. Valery Gerasimov, the chief of the General Staff, told Putin in December that Moscow's forces were advancing along the entire front line and working towards taking full control of the wider region.
WHAT INDUSTRY DOES DONETSK HAVE?
Donetsk once accounted for more than half of Ukraine's coal, finished steel, coke, cast iron and steel production, though many mines and facilities have been destroyed in the war.
Donetsk also has rare earths, titanium and zirconium - a source of revenue for whoever controls it.
The fate of Donetsk will help shape the historical legacy of Putin and Zelenskiy.
Putin casts himself as the defender of ethnic Russians everywhere. Securing all of Donetsk is central to his narrative.
Zelenskiy has gained a reputation since 2022 as the defiant defender of his country against a much bigger, more powerful neighbour.
Surrendering Donetsk - still home to at least a quarter of a million Ukrainians - could be seen as a betrayal by Ukrainians, many of whom have lost relatives on the battlefield.
A poll this month showed a majority of Ukrainians strongly opposed withdrawing troops from Donetsk in exchange for European and U.S. security guarantees.
WHAT COMPROMISE ON DONETSK MIGHT BE POSSIBLE?
Zelenskiy says Washington has proposed that neither Russian nor Ukrainian troops be deployed in Donbas and that it be turned into a demilitarised, free economic zone.
The White House has not commented on the details of the ongoing talks. U.S. President Donald Trump reiterated on Thursday after talks with Zelenskiy in Davos, Switzerland, that the war has to end but there was no sign of any breakthrough.
Kremlin aide Yuri Ushakov has said Moscow does not rule out, under the terms of any peace deal, deploying its national guard and police to Donbas instead of the regular army, something that Kyiv is unlikely to accept.
Ushakov also told the Kommersant daily last month that the land was Russian and would have to be administered by Moscow.
The U.S. has not yet decided who should administer the territory, Zelenskiy said in December.
WHAT ARE UKRAINE'S LEGAL CONSIDERATIONS?
Zelenskiy says he does not have a mandate to give away territory.
Under Ukraine's constitution, territorial changes must be settled by a referendum that can be called if it has the signatures of 3 million eligible Ukrainian voters in at least two-thirds of Ukraine's regions.
Trump has criticised the notion that what he has called a land swap would require a referendum and said "there will be some land swapping going on".
(Reporting by Andrew Osborn in Moscow, Additional reporting by the Kyiv Buro and by Dan Peleschuk in Kyiv, Editing by Timothy Heritage and Gareth Jones)
Military importance refers to the strategic value of a location or region in terms of defense, control, and operational advantages during conflicts.
Economic factors are the various elements that influence an economy's performance, including production, consumption, investment, and employment levels.
Legal considerations involve the laws and regulations that affect decisions, actions, or agreements, particularly in the context of territorial disputes.
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