At Petrograd, Foreign Minister Pokrovskiy held a press conference, declaring that Russian foreign policy remained unchanged and that the war would continue until final victory. He failed to say that Russia's state debt had reached 30 milliard rubles, on which the interest was more than half the country's revenue for 1916. Russia was headed for bankruptcy.

In Berlin, the German Chancellor responded to President Wilson's Peace Note, suggesting a peace conference.

On 27 December, at Stavka, an economic conference was held at Mogilev to discuss the many supply problems of the Russian Army. The meeting was chaired by GHQ Quartermaster General Egorievskiy.

On the Romanian Front, von Falkenhayn's troops took Rimnicu Sarat. The Bulgarians seized positions east of Macin in the Dobrudja. The Romanians ordered the evacuation of Galatz.

On 28 December, on the Northern Front, German navy airships L.35 and L.38 lifted off from Wainoden for an attack on Revel, Helsingfors, and Oesel and Dago Islands. Due to heavy weather and mechanical problems, the L.35 dropped no bombs, while the L.38 crashed on landing near Seemuppen and had to be dismantled.

On the Romanian Front, von Falkenhayn advanced north from Rimnicu Sarat against the Russian 15th Division, and moved to the southeast, engaging elements of the British RNAS Armored Car Squadron.

On the Caucasian Front, Russians drove the Turks south of Van in Armenia.

At Petrograd, the trial of I.F. Manasevich-Manuilov, who was charged with an attempt to extort money from a Petrograd bank, was scheduled to open. Such a trial would have implicated Rasputin and probably the Empress in his activities. At the urging of the Tsar the trial was halted, setting off a scandal among the people.

On 29 December, at Stavka, Acting Chief of Staff General Gurko opened a three day conference of front commanders at Mogilev. The conference organized plans to regroup their forces, create new units and plan operations for 1917. There was opposition to a February effort, due to a realization that creating new divisions was not feasible. The Tsar was present, absent minded, constantly yawning and took no part. By the end of December, Russian plants were turning out only seven heavy artillery shells and 45 light shells per 1,000 soldiers. By comparison, French numbers were 38 and 137, the British 83 and 170.