MOSCOW — Russia says it may use an arrangement similar to that used for payments for its gas supplies to pay its dollar-denominated foreign debts.

The Vedomosti business daily on Monday quoted Finance Minister Anton Siluanov as saying that Russia will offer the holders of its Eurobond obligations a payment system bypassing Western financial infrastructure.

Russia previously has offered natural gas customers to establish an account in dollars or euros at Gazprombank, then a second account in rubles. The importer would pay the gas bill in euros or dollars and direct the bank to exchange the money for rubles.

The system aims to avoid a risk of payments for gas being frozen as part of Western sanctions against Russia for its actions in Ukraine.

Siluanov told Vedomosti that a similar mechanism will be set for Eurobond holders, with an offer to open foreign currency and ruble accounts at a Russian bank.

“In payments for gas, we are credited with foreign currency and it’s converted into rubles,” Siluanov was quoted as saying. “The Eurobond settlement mechanism will work in the same way, just in the other direction.”

___

LVIV, Ukraine — The mayor of a Ukrainian city at the epicenter of the Russian offensive says that fierce street battles are going on there.

Sievierodonetsk Mayor Oleksandr Striuk told The Associated Press in a telephone interview Monday that “Russian troops have entered the city and street fighting is going on.” He added that the Ukrainian defenders were fighting to push the Russians out.

Striuk added that “the Russian troops have advanced a few blocks toward the city center.”

He said that “we have no power and no communications. The city has been completely ruined.”

The mayor said that 12,000-13,000 civilians left in the city are sheltering in basements and bunkers to escape relentless Russian bombardment. He said that “the number of victims is rising every hour, but we are unable to count the dead and the wounded amid the street fighting.”

Striuk said that 1,500 residents of the city have died since the start of the war.

___

KYIV, Ukraine -- The Ukrainian band that won the Eurovision Song Contest says it has sold the trophy at auction to raise funds to buy equipment for the Ukrainian military.

Kalush Orchestra said on social media that the trophy was sold in the online auction late Sunday for $900,000 to a cryptocurrency group during a live-streamed fundraising event.

“Friends, you are unreal!,” Kalush Orchestra said in an Instagram post. “Thanks to everyone who donated.”

Serhiy Prytula, a Ukrainian TV presenter who hosted the auction, said on Twitter that a further 11 million hryvnia ($370,000) was raised in an online raffle for the pink bucket hat which Kalush Orchestra frontman Oleh Psiuk wore during the Eurovision performance. He said the hat was won by a man in the Czech Republic. Prytula said the funds would be used to buy a drone.

___

MOSCOW — Pro-Russian authorities in southern Ukraine say that two civilians were wounded by an explosion that they blamed on Ukraine.

Halyna Danylchenko, who was appointed mayor of the city of Melitopol after its takeover by Russian troops, said that Monday’s explosion wounded two local volunteers who were involved in deliveries of humanitarian assistance to city residents. She said that they were hospitalized.

No one has claimed responsibility for the explosion, which Danylchenko blamed on Ukraine and denounced as a “cynical terror attack by the Kyiv regime” in remarks broadcast by Russian state television.

Melitopol was captured by Russian forces early in the campaign.

___

MOSCOW — Authorities in a Russia-backed separatist region in eastern Ukraine say at least five civilians have been killed in new Ukrainian shelling.

The separatist authorities said those killed during the shelling of the city of Donetsk included a 13-year old boy. They said another 13 civilians have been wounded in shelling Monday that damaged three schools in the city.

Donetsk Mayor Alexei Kulemzin said that the Ukrainian forces apparently used U.S.-supplied artillery systems in the attack.

___

An official installed by Russia in the Kherson region of southern Ukraine says grain from the area is being sent to Russia.

Kirill Stremousov, the deputy head of the Russia-backed administration for the Kherson region, told Russia’s Tass state news agency on Monday that grain from last year’s harvest was being delivered to Russian buyers.

“There is space for storing (the next crop) although obviously there is a lot of grain here,” Stremousov was quoted as saying. “Now people are partially exporting, having reached agreements with those who are buying from the (Russian) side.”

Tass also reported that Stremousov said sunflower seeds could be sent to Russian processing plants to make sunflower oil.

Ukraine has accused Russia of looting grain and farm equipment from territories held by its forces and the U.S. has alleged Russia is jeopardizing global food supplies by preventing Ukraine from exporting its harvest.

Russian troops overran most of the Kherson region in the early weeks of the war and have tightened their grip on the area since. Deputy Prime Minister Marat Khusnullin visited the region earlier this month and suggested it could become part of “our Russian family.”

___

MOSCOW — The Russian military says it has struck a shipbuilding factory in Ukraine’s south.

Russian Defense Ministry spokesman Maj. Gen. Igor Konashenkov said Monday that a Russian artillery strike on the shipyard in the port of Mykolaiv destroyed Ukrainian armored vehicles parked on its territory.

Konashenkov said that Russian artillery hit 593 areas of concentration of Ukrainian troops and equipment and 55 artillery batteries over the last 24 hours.

He added that the Russian air force hit three command posts and 67 troop locations.

___

KYIV, Ukraine — A regional governor says an intense battle is going on for the key city of Sievierodonetsk in eastern Ukraine.

Luhansk governor Serhiy Haidai said that that Russian forces have entered the outskirts and were pushing toward nearby Lysychansk. He said Monday that two civilians were killed and another five were wounded in the latest Russian shelling.

The Ukrainian military also said that Russian forces were reinforcing their positions on northeastern and southeastern outskirts of Sievierodonetsk and bringing additional equipment and ammunition into the area to press their offensive.

Sievierodonetsk has been a key target of the Russian offensive in Ukraine’s eastern Donbas industrial heartland. The city has served as the administrative center for the Luhansk region, which makes up Donbas together with the neighboring Donetsk region.

___

BRUSSELS — European Union leaders will gather Monday in a new show of solidarity with Ukraine but divisions over whether to target Russian oil in a new series of sanctions are exposing the limits of how far the bloc can go to help the war-torn country.

Ukrainian President Volodymyr Zelenskyy, who will address the 27 heads of state and government by videoconference in the evening, has repeatedly demanded that the EU target Russia’s lucrative energy sector and deprive Moscow of billions of dollars each day in supply payments.

But Hungary is leading a group of countries – along with Slovakia, the Czech Republic and Bulgaria – that rely on Russian oil and can’t afford to take such steps.

The EU has already slapped five rounds of sanctions on Russia over its actions in Ukraine. A sixth package was announced on May 4, but the hold up over oil is embarrassing the bloc. Ahead of the summit, officials suggested that a solution might be found by targeting oil transported by ships and holding fire on the pipeline oil so valuable to Hungary.

___

BERLIN -- Germany’s governing parties and the main opposition party have reached a deal to move ahead with a big increase in defense spending that Chancellor Olaf Scholz announced three months ago.

Scholz told German lawmakers three days after the Russian invasion of Ukraine started that the country would commit 100 billion euros ($107 billion) to a special fund for its military and raise its defense spending above 2% of GDP -- a measure on which it had long lagged.

Scholz wanted to anchor the special fund in the constitution. That requires a two-thirds majority in both houses of parliament, meaning that the chancellor needed support from the center-right opposition Union bloc.

Talks on the issue became mired in details, but the two sides reached an agreement Sunday night that clears the way to bring the fund to parliament. Among other things, funding for cyberdefense and support for partner countries will come from Germany’s regular budget, not the special fund.

___

MOGADISHU, Somalia — Families across Africa are paying about 45% more for wheat flour as Russia’s war in Ukraine blocks exports from the Black Sea.

Some countries like Somalia get more than 90% of their wheat from Russia and Ukraine. That’s forcing many people to substitute wheat for other grains. But the United Nations is warning that the price hikes are coming as many parts of Africa are facing drought and hunger.

The U.N. already had warned that an estimated 13 million people were already facing severe hunger in the wider Horn of Africa region as a result of a persistent drought. The World Food Program chief say’s Russia’s war on Ukraine is “piling catastrophe on top of catastrophe” for the world’s poor.