The U.S. has said it has fresh sanctions ready to impose on Russia if Moscow does not take steps to de-escalate tensions with Ukraine.
A senior U.S. official said Friday that Washington and the European Union had intensified talks about "scalpel" sanctions on Russia's financial, defense and high-tech industries as more Russian military material has flowed into Ukraine.
The U.S. State Department declined to provide details on what kinds of sanctions might be imposed.
However, a Western diplomat on Wednesday said they could include steps to limit Western purchases of debt from Russian state enterprises, to restrict technology transfers in the energy sector, and to crack down on the sale of so-called dual-use items with civilian and military applications to Russia.
The moves would respond to what American officials have said was Russia's recent increase in support to Ukrainian separatists, including the provision of Russian tanks and the preparation of more tanks to cross into eastern Ukraine.
Separatist rebellions erupted in eastern Ukraine in early April after street protests in Kiev toppled Ukrainian President Viktor Yanukovych, and Russia in turn annexed the Crimean peninsula. Eastern rebels have called for union with Russia.
"We need to see Russia secure its border, stop the flow of fighters and weapons into Ukraine and call on separatists to lay down their arms and release the OSCE hostages," U.S. State Department spokeswoman Marie Harf said Wednesday.
Harf was referring to monitors of the Organization for Security and Cooperation in Europe, or OSCE, a rights watchdog that lost contact with two monitoring teams in late May amid intense fighting between the Ukrainian army and pro-Russian separatists.
Last week, the OSCE said it had re-established contact with the two four-person teams and demanded their immediate release.
"Those are the important actions we are looking for," Harf added. "We have additional sanctions ready to go."
Meanwhile, the White House said Wednesday that U.S. President Barack Obama was "mindful" of not putting U.S. companies at a significant competitive disadvantage when mulling further sanctions against Russia over its intervention in Ukraine.
White House spokesman Josh Earnest told reporters sanctions against Russia would be most effective if implemented with Washington's European allies, who are among Moscow's top trading partners.
However, the Western diplomat, who spoke on condition of anonymity, said he thought it was unlikely that the 28-member group was now ready to undertake so-called "tier three" sanctions that would hit at entire sectors of the Russian economy.
"I think there is almost no possibility of tier three sanctions at the European Council," said the diplomat, referring to a gathering of EU leaders in Brussels on Friday.
"Putin is saying all the right things at the moment," he added.
The upper house of Russia's parliament on Wednesday fulfilled a request from Putin to rescind the right to invade Ukraine in defense of its Russian speakers that it had granted him in March. The State Department described this as "a good step" but stressed that it could easily be reversed and that Moscow needed to do more to ease tensions with Ukraine.
"Until Russia fully makes that kind of commitment to the peace process and to the stability of Ukraine, the U.S. and Europe are compelled to continue to prepare greater costs, including tough economic sanctions, with the hopes that they will not have to be used." U.S. Secretary of State John Kerry said Wednesday.
See also:
NATO Warns Russia Over Ukraine as Obama Mulls Delaying Sanctions