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Russia's flagship Black Sea missile cruiser has been "seriously damaged" and its crew forced to evacuate, Russian state media said.
Ammunition onboard the Moskva exploded after a fire, according to Moscow's defence ministry. It said the original cause of the damage was not known.
Ukraine claims it struck the vessel with two of its Neptune missiles.
The 510-crew warship has led Russia's naval assault on Ukraine, making it an important symbolic and military target.
Earlier in the conflict the Moskva gained notoriety after calling on Ukrainian border troops defending Snake Island in the Black Sea to surrender - to which they memorably radioed a message of refusal which loosely translates as "go to hell".
Russia's defence ministry said "the vessel is seriously damaged. The entire crew have been evacuated."
Ukraine claims the 186m (610 foot) vessel was struck by two of its Neptune missiles.
"It has been confirmed that the missile cruiser Moskva today went exactly where it was sent by our border guards on Snake Island!" the regional governor of Odesa Maksym Marchenko said.
Ukrainian presidential advisor Oleksiy Arestovych said "a surprise happened" with the flagship vessel.
"It burns strongly. Right now. And with this stormy sea, it is unknown whether they will be able to receive help," Mr Arestovych said in a YouTube broadcast.
The warship is a "symbol of Russian naval power in the Black Sea," Michael Petersen of the Russia Maritime Studies Institute told the BBC.
"The Moskva has been a thorn in the side of the Ukrainians since the beginning of this conflict. To see it damaged so badly...I think is going to be a real morale boost to the Ukrainians."
It may have military implications too, potentially forcing the Russian navy to "operate farther offshore now than they were previously, and that may affect its ability to provide direct fire support to troops onshore."
The Russian military has been dominant in the Black Sea since the annexation of Crimea in 2014, and has used its presence there to launch and supply the invasion.
Originally built in Ukraine in the Soviet-era, the vessel entered service in the early 1980s according to Russian media.
The Mosvka was previously deployed by Moscow in the Syria conflict where it supplied Russian forces in the country with naval protection.
It carries over a dozen Vulkan anti-ship missiles and an array of anti-submarine and mine-torpedo weapons, the reports said.
In the early days of the Russian invasion of Ukraine, the flagship made global headlines after it ordered a group of Ukrainian soldiers on an outpost in the Black Sea to surrender.
When the troops defiantly refused in a radio message, it was initially believed that the border troops had been killed but in fact they had been taken captive.
The soldiers were later released as part of a prisoner swap with Russia in late March, the Ukrainian parliament says.