Originally Published: 29 MAR 22 09:28 ET

Updated: 29 MAR 22 10:39 ET

By Jim Sciutto, Chief National Security Correspondent

(CNN) -- Russia is beginning to withdraw some forces from the area around the Ukrainian capital city of Kyiv in what the US assesses as a "major" strategy shift by Moscow, two senior US officials tell CNN.

The Russian forces now pulling back in some areas of the north will focus on gains in the south and east. The US is already observing these movements underway, including Russian Battalion Tactical Groups leaving the surrounding areas around Kyiv.

The Russian Ministry of Defense said Tuesday that it has decided to "drastically reduce hostilities" in the Kyiv and Chernigov directions, Russian Deputy Defense Minister Alexander Fomin said according to state media RIA.

The US assesses Russia will cover their retreat with air and artillery bombardment of the capital, one of the officials said. US officials caution that Russia could always reverse again if the battle conditions allow.

The move follows peace talks between Russian and Ukrainian delegations in Istanbul on Tuesday. It also comes as President Joe Biden holds a call with French President Emmanuel Macron, German Chancellor Olaf Scholz, Italian Prime Minister Mario Draghi and United Kingdom Prime Minister Boris Johnson to discuss the latest developments in Ukraine.

In the US view, this is not a short-term adjustment to regroup, but a longer-term move as Russia comes to grips with failure to advance in the north. The official said one consequence the US is concerned about is keeping the European allies unified on economic pressure and military support as Washington expects some of them to press Ukraine to accept a peace deal to end the fighting.

Secretary of State Antony Blinken on Tuesday cautioned that Russia saying it would be reducing hostilities around Kyiv could be "a means by which Russia once again is trying to deflect and deceive people into thinking it's not doing what it is doing."

"If they somehow believe that an effort to subjugate 'only' -- in quotation marks -- the eastern part of Ukraine and the southern part of Ukraine can succeed, then once again they are profoundly fooling themselves," Blinken said at a joint press conference with Moroccan Foreign Minister Nasser Bourita.

Ukraine's military intelligence head says Russian President Vladimir Putin could be looking to carve Ukraine in two, like North and South Korea.

Brig. Gen. Kyrylo Budanov, the head of Ukraine's Defense Intelligence Agency, said Russia's operations around Kyiv had failed and it was now impossible for the Russian army to overthrow the Ukrainian government. Putin's war was now focused on the south and the east of the country, he said.

"There is reason to believe that he is considering a 'Korean' scenario for Ukraine. That is, [Russian forces] will try to impose a dividing line between the unoccupied and occupied regions of our country," Budanov said. "In fact, it is an attempt to create North and South Korea in Ukraine."

Ukrainian President Volodymyr Zelensky said on Sunday that Ukraine is ready to accept a neutral status as part of a peace deal with Russia.

"Security guarantees and the neutral, non-nuclear status of our state. We are ready to accept this. This is the most important point," Zelensky said.

"The issues of Donbas and Crimea must be discussed and solved" in peace talks, Zelensky also said.