Zelensky also said that Ukraine has captured more than 80 settlements in the Kursk region, which his troops advanced into on Aug. 6.
"I thank every warrior of ours who ensures all this," Zelensky said in a video address.
Russian officials disputed that Ukraine had taken complete control of the town, with Maj. Gen. Apti Alaudinov, head of the Main Military-Political Directorate of the Russian Defense Ministry, going on national television.
"There are still some of our formations remaining in Sudzha," Alaudinov said, according to state-run media.
Ukrainian officials say troops have taken around 386 square miles of Kursk since the war began and have been fighting around Sudzha for more than a week.
Sudzha will give Ukrainian forces a key foothold in Kursk as Kyiv looks to divert Russian troops from the front lines of eastern Ukraine, take out military assets and capture Russian prisoners.
The Pentagon said Thursday that it has noticed some Russian troops redeploy from eastern Ukraine but was not able to provide any details.
Zelensky adviser Mykhailo Podolyak said forces were seeking to destroy Russian military facilities, pushing Moscow's troops away from areas that allow for strikes into Ukraine and creating a buffer zone in Kursk.
"While Russia deliberately attacked Ukraine to kill civilians and occupy its territory, which is an unconditional war crime, Ukraine is waging an exclusively defensive war, including on the aggressor's territory to ensure the protection of its own population," he wrote on X.
The Kursk offensive is the first time that a foreign army has invaded Russian soil since World War II, and it has redrawn the battle lines while putting more pressure on Putin, whose troops have struggled to restore order.
Nataliya Bugayova, a non-resident Russia Fellow at the Institute for the Study of War, said the U.S. should be "building on momentum afforded by Ukraine's operation in Kursk."
"Russia's military failures are a lynchpin that makes other actions to degrade Russia's military capability more effective," she wrote in an analysis, calling for Washington to lift restrictions on American weapons and surge arms deliveries.
The U.S. was not made aware of the Kursk offensive before it happened, Pentagon deputy press secretary Sabrina Singh told reporters.
"We are working with the Ukrainians to better understand their objectives," she said, adding they have often modified weapons deliveries for Kyiv as needed and they "reserve that right to continue to do that."
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