New talk of compromise from both Moscow and Kyiv on a status for Ukraine outside of Nato lifted hope on Wednesday for a potential breakthrough after three weeks of war.

Ukraine’s President Volodymyr Zelenskiy said negotiations were becoming “more realistic”, while Russian foreign minister Sergei Lavrov said proposals now being discussed were “close to an agreement”.

Russian President Vladimir Putin, who ordered his troops into Ukraine on February 24, said Moscow was ready to discuss neutral status for its neighbour.

But Putin also said Russia would achieve its goals in Ukraine and would not submit to what he called a western attempt to achieve global dominance and dismember Russia. The military operation was “going to plan”, he said in a televised address.

On the ground, the 21st day of the conflict saw more bloodshed as Russian forces besieged and bombarded cities.

The US said Russian forces had shot and killed 10 people waiting in line for bread in the city of Chernihiv. It did not cite evidence of the attack and Russia did not comment on the allegation, made in a US embassy statement.

The governor of Ukraine’s Zaporizhzhia region said Russian forces had fired heavy artillery at a convoy of evacuees from the southern port city of Mariupol, wounding five people. Ukraine’s military said children were among the casualties. Russia says it does not target civilians.

Three weeks into the conflict, Russian troops have been halted at the gates of Kyiv, having taken heavy losses and failing to seize any of Ukraine’s biggest cities in a war western officials say Moscow expected to win within days. Talks were due by a video link for a third straight day.

“The meetings continue, and, I am informed, the positions during the negotiations already sound more realistic,” Zelenskiy said in a video address overnight.

The Kremlin said the sides were discussing status for Ukraine similar to that of Austria or Sweden, both members of the EU that are outside the Nato military alliance.

Ukraine’s chief negotiator said Kyiv was still demanding a ceasefire and the withdrawal of Russian troops.

The signs of compromise sent relief through global financial markets.

Europe’s biggest invasion since World War II has ravaged Ukrainian cities and sent more than 3 million refugees fleeing to neighbouring countries.

The streets of the capital Kyiv were largely empty after authorities imposed a 35-hour curfew. Several buildings in a residential area were badly damaged after what appeared to be a Russian missile was shot down in the early hours.

Still, Ukrainian forces have withstood an assault by a much larger army. Zelensky said Ukrainian troops had killed a fourth Russian major general in the latest fighting.