Ukraine must decide whether to advance or retreat before it's too late in response to the Russian incursion.

• The gains made in Russia's Kursk region after more than a week of Ukraine's surprise incursion have likely surpassed Kyiv's expectations.
• Oleksandr Syrskyi, Ukraine's top military commander, stated that Ukrainian forces now control over 1,000 square kilometers of Russian territory and have seized 74 settlements.
• Moscow has not yet responded strongly to the incursion, but has threatened a "worthy" retaliation.
• Analysts advise Ukraine to weigh its options: strengthen its position and defend, or advance and risk a fierce and lethal Russian retaliation.

The gains made in the last week of Ukraine's surprise incursion into Russia's Kursk region are likely to have exceeded even Kyiv's wildest expectations.

Ukrainian troops have seized over 1,000 square kilometers of Russian land and captured 74 settlements, as announced by Ukraine's top military commander Oleksandr Syrskyi to President Volodymyr Zelenskyy on Tuesday.

Since the beginning of the day, more than 100 Russian soldiers have been captured by Ukraine's forces, who have advanced even further into Russia, making gains of 1-2 kilometers.

On Thursday, Ukraine launched its largest ever drone attack on Russian military airfields, destroying a Russian Su-34 jet and disrupting its ability to launch glide bombs at Ukrainian front-line positions and cities, according to Ukraine's General Staff. However, CNBC was unable to independently verify the claims made by Zelenskyy or the military.

Since the incursion, Russia has been furious, as it marks the first time a foreign army has set foot on Russian soil since World War II. The raid was aimed at stopping Russia's ongoing offensive in eastern Ukraine and destabilizing the country. Moscow officials have also used the incursion to attack Ukraine's Western supporters.

Russia's military command has been unable to mount a robust response to the incursion in the southwestern region of Kursk, despite President Putin's vow of a "worthy" retaliation to what he initially described as a "large-scale provocation."

While Kyiv can currently celebrate its cross-border operation, geopolitical and defense analysts caution that a response is inevitable. Therefore, Kyiv must develop a plan for its next move.

A decision must be made swiftly on whether Ukraine should maintain its territorial control in Kursk, continue its advances, or withdraw its forces to preserve lives and avoid a potential furious Russian response.

According to Andrius Tursa, Central & Eastern Europe advisor at risk consultancy Teneo, the initial phase of the offensive that resulted in rapid Ukrainian advances and the establishment of defensive positions in the Kursk region seems to be concluding.

"The first week of the offensive was successful for Kyiv from a military and political standpoint, but it still carries significant risks, according to him. It is crucial to monitor whether the Ukrainian forces can maintain control over the occupied territory and withdraw troops and equipment with minimal losses if necessary."

Experienced troops with advanced Western military equipment, which had been pulled back from the frontlines in Ukraine, are carrying out the offensive, Tursa said.

He cautioned that the country's defensive capabilities could suffer negative consequences if the incursion's outcome is perceived as unworthy of the losses, which could also have political repercussions.

Russia stunned, but not for long

Last week, Ukraine's cross-border raid left Russia stunned, with several thousand Ukrainian troops entering Kursk. In response, Russian authorities in Kursk and neighboring Belgorod initiated evacuation programs, affecting around 300,000 residents. Both states have also declared a state of emergency.

Despite admitting that Ukrainian units have advanced up to 30 kilometers into Russian territory, Russia's defense ministry claims to be successfully repelling and thwarting Ukrainian advances.

On Wednesday, the ministry stated that various ground and air units, as well as artillery and drone strikes, prevented enemy mobile armored groups from advancing deeper into Russian territory.

According to analysts at the Institute for the Study of War, Russia is mainly relying on Russian conscripts and some regular and irregular military units pulled from less critical sectors of the frontline in eastern Ukraine to tackle the ongoing Ukrainian incursion.

However, analysts warn that Russia's unenthusiastic reaction to Ukraine's incursion may not persist for long.

Teneo's Tursa stated that Russia's counter-terrorist forces, comprised of domestic security units, are likely to intensify their efforts to liberate the occupied territories in the coming days. This may involve resolving the issue of whether Russia should employ heavy weapons within its own borders.

According to Matthew Savill, the military sciences director at the Royal United Services Institute defense think tank, it will be challenging to maintain a force of any size in Russia and defend against counterattacks due to the limited reserves available to Ukraine. Despite this, neither has it resulted in the Russians slowing their advances around the Donbas, where the situations around Chasiv Yar and towards Povrovsk remain difficult.

'Occupation' or retreat?

Ukrainian officials and defense analysts admit that the incursion into Russia is aimed at increasing Ukraine's bargaining power in any future peace talks with Russia. The timing is significant as the possibility of a second term for former President Donald Trump increases the likelihood that Ukraine could be pressured or forced into negotiations with its enemy and territorial concessions, in order to end the war.

Keeping hold of territory in Kursk could be advantageous in negotiations, but it may result in a significant expense if Russia responds with greater strength and organization to the invasion.

On Wednesday, President Zelenskyy hinted at the possibility of a prolonged operation in Kursk during a meeting on the security and humanitarian situation in the region. He discussed security measures, humanitarian aid, and the creation of military administrations if required, as stated on Telegram.

An anonymous Ukrainian official stated that Kyiv hopes that the successful completion of the operation in Kursk will increase their negotiating power and change the dynamics of the war, as the presence of Ukrainian troops in Russia will serve as a force to do so.

The official maintained that Ukraine had no intention of seizing or annexing any part of Russia but aimed to utilize its incursion to alter the course of the conflict, particularly in eastern Ukraine.

"The official stated that Ukraine's actions were not about seizing Russian territory, but rather using its current position as leverage to bring about a just peace more quickly."

According to academic Taras Kuzio, a professor of political science at the National University Kyiv-Mohyla Academy in Kyiv, occupying Russian territory ahead of any peace talks is viewed as a way to strengthen Ukraine's bargaining position and potentially weaken Putin's position in future peace negotiations.

In addition to the benefits of occupying Kursk, he pointed out that it would prevent Russian artillery fire and drone flights targeting north-eastern Ukraine and block supply lines to Russian occupation forces in the Donbas region. Furthermore, Ukraine's occupation could serve as a base for Russian opposition groups within Russia.

Kuzio stated that Ukraine's incursion into Russia is a bold and risky move, but it may yet fail; that's the nature of war. However, it has already brought benefits. It has shown that the fear of crossing Russian "red lines" leading to nuclear escalation is a myth, and Ukraine's battle-hardened military remains a formidable force. Putin is once again discovering this as Kuzio pointed out.