KIEV, Ukraine -- The US has urged Russia to "leave Ukraine in peace" and warned that "every inch" of territory in neighbouring Nato states would be defended if threatened.
US Secretary of State John Kerry said that Russia had failed to abide by the terms of a de-escalation agreement.
Russia's President Putin insisted that his country had no troops in Ukraine.
The comments came after pro-Russia activists stormed several more buildings in eastern Ukraine.
Mr Kerry said that Russia had "escalated the crisis" since signing the de-escalation agreement last month.
"Not one single step has been taken by Russia in any public way that seriously attempts to live by the spirit or the law of what was signed in that agreement" he said.
He went on to say that NATO was facing a "defining moment" in the strength of its alliance in the face of Russian actions.
Moscow has said it has no intention of invading eastern Ukraine, where pro-Russia activists have seized government buildings in more than a dozen towns and cities.
"I solemnly declare that there are no Russian instructors there, nor any special forces there, nor troops," said Mr Putin.
Mr Putin also warned that new EU and US sanctions against Russia could impact on the work of Western energy firms.
"If this continues, we will of course have to think about how (foreign companies) work in the Russian Federation, including in key sectors of the Russian economy such as energy," he said.
In Kiev on Tuesday, activists mourning those who died in protests against the then pro-Moscow government earlier this year took part in a torch-lit ceremony.
Sanctions screw is tightened
Eastern Ukraine, which has a large Russian-speaking population, was a stronghold for former President Viktor Yanukovych before he was overthrown by protesters in February.
The interim government has rejected the pro-Russian activists' demands for greater autonomy, fearing they could lead to the break-up of the country or more regions being annexed by Russia, as happened with Crimea last month.
Pro-Russian activists continue to detain some 40 people, including seven military observers linked to the Organisation for Security and Co-operation in Europe (OSCE) seized last week.
On Tuesday evening, the self-styled "mayor" of the town of Sloviansk, where the observers are being held, said "good progress" had been made at talks with OSCE representatives.
Vyacheslav Ponomaryov had earlier warned that they would only be released if the EU dropped its sanctions against separatist leaders.
Earlier, the EU published a fresh list of 15 individuals facing travel bans and asset freezes.
It included the chief of the Russian General Staff, the head of Russian military intelligence, and a Russian deputy prime minister, as well as separatist leaders in Crimea, Luhansk and Donetsk.
On Monday, the US announced sanctions against seven individuals and 17 companies it said were linked to President Putin's "inner circle".
The pro-Russian gunmen in Ukraine's east seem to be following a strategy of constant expansion and pressure on the Kiev government.
Hardly a day goes by without another incident.
Just recently, official buildings in Kostyantynivka have been taken over, Western military monitors detained, peaceful demonstrators in Donetsk attacked, and now the regional administration building in Luhansk has been seized.
It is difficult to say what their ultimate goal is.
Perhaps it is to keep government officials in Kiev on the defensive, forcing them to put out a number of fires at once, while others pop up throughout the region.
Or else it is simply to keep the situation unstable, in order to prevent the presidential election scheduled to take place on 25 May.
Or it could be just the opposite, as many in Kiev and throughout the country fear: to provoke the Ukrainians into a full crackdown, which would in turn spark a Russian invasion.
The militants have called on Moscow to intervene on more than one occasion.
Source: BBC News Europe