Russia-backed separatists in eastern Ukraine took the embattled town of Debaltseve on Wednesday as government forces retreated, the Associated Press reported.

The rebels hoisted a flag over the town in triumph and said they had taken hundreds of Kiev's soldiers captive.

Ukrainian President Petro Poroshenko confirmed that he had ordered the pullout, and AP reporters saw several dozen troops retreating with their weapons Wednesday morning. They were "covered in dirt and (looked) exhausted," the news service detailed.

The defeat in the strategic railway hub marked "a major defeat for the government," the Washington Post judged. It was also a "stunning reminder of the region's instability" that came less than a week after the announcement of ceasefire, which has nevertheless held in other parts of the embattled region.

The truce had been brokered in a Minsk summit between Poroshenko and Russian President Vladimir Putin, the result of a top-level diplomatic effort by the leaders of France and Germany, President François Hollande and Chancellor Angela Merkel.

The separatists have claimed that the area around Debaltseve is not covered by the Minsk agreement, Fox News noted. Putin, meanwhile, mocked Ukrainian forces and suggested they should concede defeat, the news channel added.

"Of course, it's always bad to lose," the Russian president told reporters. "Of course, it's always a hardship when you lose to yesterday's miners or yesterday's tractor drivers. But life is life. It'll surely go on."

Poroshenko said that 30 Ukrainian soldiers were injured in the withdrawal while insisting that there were no fatalities.

"Debaltseve was under our control, it was never encircled," the president said in televised comments. "Our troops and formations have left in an organized and planned manner."

But other reports suggested that more than 100 troops had been wounded, according to Fox News. One soldier told the AP of heavy government losses, while another said troops had not been able to get food or water because of intense rebel shelling.

Viktor Ponosov, a rebel commander, said Ukrainian forces appeared to have run out of supplies and ammunition.

"We have heard that they are calling their relatives and friends from within the encirclement and saying to them: 'Please help us, because they are killing us and destroying us,'" Ponosov noted.

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