A Ukrainian woman reacts next to her house following a rocket attack in the city of Kyiv. AP

Russian missiles have hit the Ukrainian town of Vasylkiv southwest of the capital, Kyiv, setting an oil terminal ablaze, the town's mayor said on Sunday.

"The enemy wants to destroy everything around," Natalia Balasinovich said in a video posted online.

Western allies are preparing sweeping new sanctions against Russia, including banishing its key banks from the main global payments system, drawing thanks from Ukraine on Sunday as its forces battled advancing Russian troops.

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Ukrainians, Russians fight on streets of capital Kyiv

Russia unleashed a wave of attacks on Ukraine targeting airfields and fuel facilities in what appeared to be the next phase of an invasion that has been slowed by fierce resistance. The US and EU responded with weapons and ammunition for the outnumbered Ukrainians and powerful sanctions intended to further isolate Moscow.

Huge explosions lit up the sky early Sunday south of the capital, Kyiv, where people hunkered down in homes, underground garages and subway stations in anticipation of a full-scale assault by Russian forces.

Ukrainian soldiers walk past debris of a burning military truck in Kyiv, Ukraine, on Saturday. AP

Photographs and video posted online showed large flames rising under the night sky. The authorities warned residents to be on alert for toxic fumes.

Ukraine’s president says his country is ready for peace talks with Russia but not in Belarus, which was a staging ground for Moscow’s 3-day-old invasion.

Speaking in a video message Sunday, President Volodymyr Zelenskyy named Warsaw, Bratislava, Istanbul, Budapest or Baku as alternative venues. He said other locations are also possible but made clear that Ukraine doesn’t accept Russia’s selection of Belarus.

Ukrainian President Volodymyr Zelenskyy speaks during a press conference. File photo

The Kremlin said Sunday that a Russian delegation had arrived in the Belarusian city of Homel for talks with Ukrainian officials. Kremlin spokesman Dmitry Peskov said the delegation includes military officials and diplomats.

"The Russian delegation is ready for talks, and we are now waiting for the Ukrainians,” Peskov said.

Russia invaded Ukraine on Thursday, with troops moving from Moscow’s ally Belarus in the north, and also from the east and south.

Also on Sunday morning, Russian-backed separatists in Ukraine's Luhansk province said an oil terminal was blown up by a Ukrainian missile in the town of Rovenky.

There were reports of heavy fighting near the northeastern city of Kharkiv, where Russian troops blew up a natural gas pipeline, a Ukrainian state communications agency said.

The mangled remains of a charred military truck on a street in Kyiv, Ukraine, on Saturday. AP

Zelenskyy’s office also said Russian forces blew up a gas pipeline in Kharkiv, the country’s second-largest city, prompting the government to warn people to protect themselves from the smoke by covering their windows with damp cloth or gauze.

"We will fight for as long as needed to liberate our country,” Zelenskyy vowed.

Terrified men, women and children sought safety inside and underground, and the government maintained a 39-hour curfew to keep people off the streets. More than 150,000 Ukrainians fled for Poland, Moldova and other neighboring countries, and the United Nations warned the number could grow to 4 million if fighting escalates.

President Vladimir Putin hasn’t disclosed his ultimate plans, but Western officials believe he is determined to overthrow Ukraine’s government and replace it with a regime of his own, redrawing the map of Europe and reviving Moscow’s Cold War-era influence.

Smoke and flames rise during the shelling near Kyiv. Reuters

The US, European Union and United Kingdom agreed to block "selected” Russian banks from the SWIFT global financial messaging system, which moves money around more than 11,000 banks and other financial institutions worldwide, part of a new round of sanctions aiming to impose a severe cost on Moscow for the invasion. They also agreed to impose ”restrictive measures” on Russia's central bank.

It was unclear how much territory Russian forces had seized or to what extent their advance had been stalled. Britain’s Ministry of Defense said "the speed of the Russian advance has temporarily slowed likely as a result of acute logistical difficulties and strong Ukrainian resistance.”