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Wooden crosses, most of them marked with numbers, were discovered in a forest outside the town by advancing Ukrainian forces.
Authorities said they would start exhuming some of the graves on Friday.
It is not yet clear what happened to the victims, but early accounts suggest some may have died from shelling and a lack of access to healthcare.
Speaking on Friday, the head of Ukraine’s national police service said most of the bodies belonged to civilians.
Ihor Klymenko told a news conference that although soldiers were also believed to be buried there, none had been found so far.
Authorities in Ukraine had previously told the BBC more than 400 bodies were thought to be buried at the site.
The UN says it hopes to send a monitoring team to the town in the coming days.
A spokesperson for the body’s human rights’ office said it would be trying to find out whether those who died were civilians or military personnel, and the cause of any of the deaths.
Izyum, invaded in the early days of the war, was used by Russia as a key military hub to supply its forces from the east.
In his nightly address, President Volodymyr Zelensky said the “necessary procedural actions” had begun in the area.
“We want the world to know what is really happening and what the Russian occupation has led to. Bucha, Mariupol, now, unfortunately, Izyum… Russia leaves death everywhere,” he said. “And it must be held accountable for that.”
The Ukrainian leader was referring to alleged mass graves found this spring in Bucha, near the capital Kyiv, and also near Mariupol – the key south-eastern Ukrainian port now occupied by Russian troops.
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Andriy Yermak, the head of President Zelensky’s office, tweeted a photo of the alleged mass burial site, also saying that more information was expected on Friday.
Much of Izyum lies in ruins, with one local politician telling reporters that up to 80% of the town’s infrastructure has been destroyed, and bodies are still being discovered in the rubble.
Izyum and a number of other cities in the Kharkiv region were liberated earlier this month during a swift Ukrainian counter-offensive that appeared to have surprised Russian troops and left them unprepared to defend their positions.
Ukraine says it has identified more than 21,000 possible war crimes – including killing civilians and rape – committed by Russian troops since President Vladimir Putin ordered a full-scale invasion of the country on 24 February.
Investigators and journalists found what appeared to be evidence of the deliberate killing of civilians in Bucha and other nearby areas.
The International Criminal Court has already sent a team of investigators and forensics experts to Ukraine to investigate this.
The Russian government has repeatedly denied targeting civilians, accusing Ukraine and the West of fabricating evidence.
In a separate development on Friday, the prosecutor general of the Russian-backed self-proclaimed Luhansk People’s Republic was killed in a bomb blast, according to Russian news agencies.
Sergei Gorenko was reported to have died along with his deputy in an explosion at his office in the regional capital.
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