 -- After weeks of assault from the air, Debaltseve looks like a burned-out shell of a town.

Impact craters from heavy shelling pock the Ukrainian land. Several homes appear to lie in ruin, their roofs and walls collapsed or full of holes.

Today, Ukraine pulled its troops out of the strategic village in the rebel-held east, home to important railway infrastructure, after they were surrounded for days by Russian-backed rebel forces.

Despite a ceasefire agreed to last week, rebel forces continued to pound the village. Rebel leaders insisted that gains made before the ceasefire went into effect at midnight Sunday meant the village should be part of their territory because it was cut off from the rest of Ukraine.

At least 40 Ukrainian troops were killed and another 170 injured, according to the manager of the morgue in the nearby town of Artemivsk and a doctor at the hospital there.

Reporters who attempted to reach Debaltseve over the past week were turned back at checkpoints.

Now, thanks to drone footage uploaded to YouTube today, the world is getting its first glimpse of the damage from the air.

The village appears nearly abandoned, with only a couple cars visible along the roads.

The continued fighting there threatened to undermine the fragile peace deal.

Ukraine’s President Petro Poroshenko has painted the decision to cede Debaltseve as a strategic retreat, but leaders from the self-declared Donetsk People’s Republic, the main rebel body in the region, declared victory.

The move comes a day after Russian President Vladimir Putin, long accused by the West and Ukraine’s government of arming and backing the rebels, urged President Poroshenko to pull out of Debaltseve.

“I hope that the responsible figures in the Ukrainian leadership will not hinder soldiers in the Ukrainian army from putting down their weapons,” Putin told reporters.

He suggested the rebels would allow Ukrainian soldiers who turn themselves in will be allowed to return to their families.

Putin also took something of a victory lap, gloating over the negotiated stalemate that many believe favors the rebels.

“To lose is always painful. It’s a hardship especially when you lose to yesterday’s miners and tractor drivers. But life is life,” he reportedly said.

The Ukrainian withdrawal from Debaltseve gave some hope that the ceasefire might hold a bit longer, but some fighting continues elsewhere.

Western journalists in Donetsk reported fresh sounds of shelling in central Donetsk, the rebel capital.

An ABC News reporter crossing from Donetsk through a Ukrainian checkpoint Wednesday witnessed artillery fire and was told it was aimed at the Donetsk airport.

ABC News' Dragana Jovanovic contributed to this report.