Pro-Russian separatists in Ukraine are reported to be regrouping in Donetsk after government forces retook some of their main strongholds.
President Petro Poroshenko said the recapture of the rebels' stronghold of Sloviansk on Saturday was of 'huge symbolic importance'.
But he warned it was too early for celebrations.
Despite recent losses, the rebels still hold the regional capitals of Donetsk and Luhansk and other key areas.
Sloviansk had been considered a focal point of the rebellion, and was the military centre of the self-declared separatist People's Republic of Donetsk.
But on Saturday, Ukrainian forces raised the national flag over the city hall after the rebels left the city following a night of mortar shelling apparently orchestrated by the breakaway region's military commander, Igor Strelkov.
President Poroshenko said troops had 'liberated Sloviansk from terrorists', and that it was 'the start of a turning point in the fight against the militants'.
The rebels said they had staged a 'tactical retreat' to Donetsk, the main city in the region.
Ukrainian Interior Minister Arsen Avakov said some rebels had surrendered or were trying to escape by blending in with the civilian population.
But those that remained appeared to be heading next for the town of Horlivka, he said on his Facebook page, and were being confronted on the road by government troops.
Analysis: David Stern, BBC News, Kiev
Sloviansk served as a command centre and carried symbolic value, and its loss was a blow to the rebel insurgency.
President Poroshenko hailed government forces' taking of the city, but warned it was still too early 'for fireworks displays.'
Donetsk in particular is a city of one million, and could pose challenges to the government if fighting moves there.
Rebel leaders have called for a demonstration to be held on Donetsk's main square on Sunday. Talks to try to end the fighting were supposed to begin on Saturday, but so far no meeting has been announced.
Ukraine crisis timeline
Sloviansk is the latest of several territorial gains for the government since it launched an offensive this week in Donetsk and Luhansk regions, following the breakdown of a ceasefire.
The Ukrainian government had earlier claimed to have retaken two small towns.
And other reports said Kramatorsk city, near Sloviansk, had also been recaptured.
Who is Igor Strelkov?
Real name Igor Girkin, self-declared commander-in-chief of Donetsk People's Republic Ukraine says he works for Russian military intelligence agency the GRU On EU sanctions list for posing threats to Ukraine's independence Noted for love of re-enacting Roman, Napoleonic and 20th Century battles
Violence erupted in eastern Ukraine in April, when separatists declared independence in the Donetsk and Luhansk regions.
Earlier this week, the government claimed to have retaken two-thirds of the territory in those regions.
The current crisis started when President Viktor Yanukovych decided last November not to sign an agreement with the EU.
The decision led to street protests in Kiev, and Mr Yanukovich was eventually overthrown.
The developments angered Russia, which annexed Ukraine's Crimea region.
Entities 0 Name: Donetsk Count: 7 1 Name: Ukraine Count: 5 2 Name: Luhansk Count: 3 3 Name: EU Count: 2 4 Name: Poroshenko Count: 2 5 Name: Igor Strelkov Count: 2 6 Name: Kiev Count: 1 7 Name: Pro-Russian Count: 1 8 Name: David Stern Count: 1 9 Name: People 's Republic of Donetsk Count: 1 10 Name: Horlivka Count: 1 11 Name: Russian Count: 1 12 Name: Kramatorsk Count: 1 13 Name: Kiev Sloviansk Count: 1 14 Name: GRU Count: 1 15 Name: Napoleonic Count: 1 16 Name: Arsen Avakov Count: 1 17 Name: Viktor Yanukovych Count: 1 18 Name: Sloviansk Count: 1 19 Name: Russia Count: 1 20 Name: Petro Poroshenko Count: 1 21 Name: Donetsk People 's Republic Ukraine Count: 1 22 Name: Igor Girkin Count: 1 23 Name: Crimea Count: 1 24 Name: BBC News Count: 1 25 Name: Yanukovich Count: 1 Related 0 Url: http://ift.tt/1m4ji3t Title: Ukraine leader hails 'turning point' Description: Ukraine's president has hailed the recapture of the rebel stronghold of Sloviansk as the start of a turning point in the three-month conflict. Petro Poroshenko said it was not a total victory, but rather an event of "huge symbolic importance".
