The West has hit Russia with new sanctions over its role in the Ukraine conflict after Kiev admitted losing more ground to the rebels, but Moscow angrily accused its foes of trying to wreck the push for peace.
President Barack Obama announced on Thursday that the US would intensify punitive measures against Moscow over its “illegal actions” in Ukraine to further isolate the Kremlin despite a ceasefire deal between Kiev and the pro-Russia separatists unveiled six days ago.
He said the US would intensify sanctions in the defence, finance and energy sectors.
Earlier the European Union said it would impose fresh sanctions on Russia on Friday but held out the prospect that they could be lifted after a truce review at the end of September.
The coordinated announcements came after Kiev and NATO said around 1000 Russian troops remained in Ukraine after allegedly crossing the border to bolster the separatist rebellion.
Kiev acknowledged the insurgents have extended their control over territory on the eastern border to the Sea of Azov after a lightning counter-offensive last month reportedly backed by elite Russian forces.
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But Moscow blasted the move by the European Union, its biggest trading partner.
“By taking this measure, the EU has practically decided against the process of a peaceful settlement of the Ukrainian crisis,” the foreign ministry said.
The EU move had been delayed after some member states – wary that further reprisals by the Kremlin could hit their own fragile economies – had said they wanted to wait and see what happened on the ground in Ukraine.
Among the latest punitive measures, major Russian oil companies and defence companies will be barred from seeking finance on European capital markets.
Twenty-four people including rebel leaders in eastern Ukraine, the government in Russian-annexed Crimea, “as well as Russian decision-makers and oligarchs,” were added to a list of individuals facing EU travel bans and asset freezes.
The EU announcement sent the ruble plunging to new record lows while stocks in Russia, where the economy is already on the brink of recession, slid.
Russia has already threatened to bar EU airlines from its airspace and responded to the latest measures by saying it has drawn up a list of targeting imports of consumer goods and second-hand cars.
Last Friday’s peace pact – the first backed by both Kiev and Moscow since the insurgency erupted across Ukraine’s industrial heartland in April – has so far held despite accusations of violations on both sides.
Kiev says eight servicemen and three civilians have died since the truce on Friday.
Poroshenko pledged Wednesday he would submit a bill to parliament granting parts of the east temporary self-rule, although he insisted this did not mean that Ukraine would be partitioned.
However leaders of the self-declared “people’s republics” in mainly Russian-speaking Donetsk and Lugansk say they have no intention of abandoning the fight for full independence.
The pan-European security body the OSCE said it will use drones to monitor the border as part of plans to boost its mission in Ukraine to help “de-escalate” the crisis.
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