Large Ukrainian Drone Attack Targets Putin Residence, Kremlin Says Will ‘Revise’ Peace Talks

Update(1115ET): The Trump-backed effort to forge ahead on achieving peace in Ukraine may have just been completely derailed by a major development. Just as Trump described Monday morning that he had a ‘positive’ phone call with President Putin about Ukraine, the Kremlin is alleging that Ukraine launched a major drone attack on President Putin’s “official residence” in the Novgorod region from Sunday night into Monday. It is presumably one of many of his residences, and there’s no indication he was there when the alleged attack wave occurred.

Fresh words of Russian Foreign Minister Sergei Lavrov indicate that Ukraine fired 91 drones targeting Putin’s residence in what’s being described as a sustained attack spanning hours, but that all of them were destroyed by the significant anti-air defenses.

PUTIN TOLD TRUMP ABOUT ATTACK ON ONE OF HIS RESIDENCES: IFX

Moscow now says it will “revise” its negotiating position on ending the war in Ukraine, after what it dubbed the overnight “terrorist attack.” The Ukrainian government immediately rejected the allegation, calling it a “fabrication”:

Lavrov said there was no damage or casualties resulting from the incident but that Russian armed forces had selected targets for “retaliatory strikes.” Ukrainian President Volodymyr Zelensky immediately rejected the claim as “a complete fabrication” from Russia.

Russian Foreign Minister Sergey Lavrov blames Ukraine for an attempted drone attack on Putin’s “Dolgiye Borody” residence in Valday, Novgorod Oblast of Russia on the night of December 29.

Lavrov:

🗣️ “Russia’s negotiating position will be revised taking into account the Kyiv… pic.twitter.com/GurqsmcYgp

— Status-6 (Military & Conflict News) (@Archer83Able) December 29, 2025

There’s a likelihood that the capital of Kiev is going to have a bad night, as this means more missiles and drones could rain down on the city once again, possibly even targeting key government headquarters buildings – as happened at least once before.

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European defense stocks moved lower on Monday after President Trump and Ukrainian President Volodymyr Zelensky made progress in talks aimed at ending the Russia-Ukraine conflict.

On Sunday evening, after the talks, Trump told reporters, “I do think we’re getting a lot closer, maybe very close.”

Zelensky told reporters the peace talks were a “really great discussion” in which U.S.-Ukraine security guarantees were “100% agreed” upon. He added, “We agree that security guarantees are a key milestone in achieving lasting peace.”

Zelensky said Trump will host another meeting next month with Ukrainian and European officials to advance a peace deal that is nearing completion. Trump confirmed that he spoke with Russian President Vladimir Putin ahead of the Zelensky talks and plans to hold another call with Putin.

The full summary of the Trump-Zelensky “great meeting” is available here.

The Goldman Sachs European Defense Index fell by roughly 2% on Monday following overnight developments.

Larger timeframe. 

Since Russia invaded Ukraine in early 2022, the GS European Defense Index has delivered outsized annual returns.

UBS analyst Tricia Wright commented on the moves:

“Defense stocks were among the top fallers in Europe after the Trump-Zelensky meeting. The Italian defense group Leonardo declined by 4.4%, topping the STOXX Europe 600 fallers list, while Germany’s Rheinmetall and Hensoldt were both down by about 3%. Talks to end the Ukraine war on Sunday spurred fresh optimism from U.S. President Trump, yet there are no clear signs that the two sides have reached a breakthrough, as Russia continues to push for land gains and reject a ceasefire,” The Wall Street Journal reported.

Even as a potential peace deal in Eastern Europe nears, we expect defense stocks to remain elevated given record defense spending.

UN Secretary-General António Guterres recently wrote in a report on the rise in military expenditure: “The world is spending far more on waging war than on building peace.”