Russia said it would scale down fighting around two Ukrainian cities following talks with Ukraine on Tuesday and raised the possibility of a meeting between the Russian and Ukrainian presidents.

The outcome of the face-to-face talks at a palace in Istanbul raised hopes after more than a month of conflict that has left thousands dead and forced millions from their homes.

But London and Washington immediately cast doubt on Russia's words and, on the ground, Ukraine said seven people were killed by a Russian strike on a government building in the city of Mykolaiv.

Following the talks, Ukrainian negotiator David Arakhamia said there were "sufficient" conditions for Ukrainian President Volodymyr Zelensky and Russian President Vladimir Putin to meet.

Arakhamia also called for "an international mechanism of security guarantees where guarantor countries will act in a similar way to NATO's article number five -- and even more firmly".

Russian Deputy Defence Minister Alexander Fomin said there had been progress in talks on "the neutrality and non-nuclear status of Ukraine".

Therefore, "a decision has been made to radically, by several times reduce the military activity" around the capital Kyiv and the city of Chernigiv, he said.

Chief negotiator Vladimir Medinsky said there had been a "meaningful discussion".

US Secretary of State Antony Blinken responded saying he doubted Russia's "seriousness".

"There is what Russia says and there is what Russia does. We're focussed on the latter," he said, speaking at a press conference in Morocco.

"What Russia is doing is the continued brutalisation of Ukraine and its people, and that continues as we speak."

A spokesman for British Prime Minister Boris Johnson said: "We will judge Putin and his regime by his actions and not by his words".

Seven killed in Mykolaiv strike 

Following the announcements on Tuesday, European stock markets lifted and oil prices fell by five percent as supply fears eased, while the ruble surged 10 percent against the dollar.

Just hours earlier, Ukraine said seven people were killed in a Russian strike against the regional government headquarters in Mykolaiv, adding to a toll estimated by Zelensky at 20,000 so far.

"I was having breakfast in my apartment," Donald, 69, a retired Canadian postal worker with Ukrainian residency told AFP. "I heard a whoosh, then a boom and my windows rattled."

Another local resident, Viktor Gaivonenko, who was helping clean up the debris, said: "Putin is a bastard. That's all there is to it".

Ukrainian forces have pushed back Russian forces from around the city in recent days and have recaptured territory in other parts of the country, including in the suburban town of Irpin outside Kyiv -- an important gateway to the capital.

Ukraine has also resumed evacuations from areas in the south of the country occupied by Russian forces.

Crime against humanity

In response to the invasion, the West has imposed crushing economic sanctions and many Western companies have pulled out of Russia.

There have also been several rounds of diplomatic expulsions, which continued on Tuesday with Belgium, Ireland and the Netherlands announcing a total of 42 diplomats would be expelled.

Russia has hit back against Western sanctions, saying that its gas deliveries to the European Union must now be paid for in rubles.

"Nobody will supply gas for free. This is just impossible. And it can only be paid in rubles," Kremlin spokesman Dmitry Peskov told reporters.

Russia also said it was expelling 10 diplomats from Estonia, Latvia and Lithuania in a tit-for-tat move after the Baltic countries expelled Russian diplomats over the conflict.

While Ukraine's forces are counterattacking in the north, they are struggling to retain control of the southern port city of Mariupol.

Russian forces have encircled the city and have embarked on a steady and indiscriminate bombardment, trapping an estimated 160,000 people with little food, water or medicine.

At least 5,000 people have already died, according to one senior Ukrainian official who estimated the real toll may be closer to 10,000 when all the bodies are collected.

Zelensky said the Russian siege constituted a "crime against humanity, which is happening in front of the eyes of the whole planet in real time".

As he opened the Russia-Ukraine talks in Istanbul, Turkish President Recep Tayyip Erdogan acknowledged that both sides had "legitimate concerns", but urged the delegations to "put an end to this tragedy".

Russian oligarch and Chelsea Football Club owner Roman Abramovich, who has been hit by Western sanctions, was also in attendance.

The Kremlin said he was acting as an intermediary and denied reports that he had been poisoned during a previous round of negotiations in Ukraine.

UN nuclear visit 

Ukraine's foreign ministry called the situation "catastrophic," saying Russia's assault from land, sea and air had turned a city once home to 450,000 people "into dust".

France, Greece and Turkey are hoping to launch a mass evacuation of civilians from Mariupol within days, according to French President Emmanuel Macron, who is seeking agreement from Putin.

Western powers say they have seen evidence of war crimes, which are already being investigated by the International Criminal Court.

On Monday, Ukraine's prosecutor general, Iryna Venediktova, said there was proof that Russian forces have used banned cluster bombs in the southern Odessa and Kherson areas.

Biden has expressed his "moral outrage" at the conduct of the war, and ruffled feathers over the weekend by suggesting Putin "cannot remain in power".

He has since denied seeking regime change and swatted away concern that his remarks would ratchet up tensions with Putin. 

"I don't care what he thinks," Biden said on Monday.

The conflict has also raised fears over nuclear safety after Russia seized several facilities, including Chernobyl, the site of the world's worst nuclear disaster.

The chief of the International Atomic Energy Agency, the UN atomic watchdog, was visiting Ukraine on Tuesday.

"We must act now to help prevent the danger of a nuclear accident," IAEA chief Rafael Grossi said on Twitter.