Pro-Russian separatists have seized government buildings in Ukraine's eastern region and clashes have erupted alongside street protests by supporters of both sides in the dispute.
Kiev's Western-backed government has accused Russia's President Vladimir Putin of fomenting the unrest, but admits its forces are powerless to halt the expanding rebellion.
Moscow in turn has called on Kiev to halt its "anti-terrorist" operation and to withdraw security forces from the region.
Ukraine responded by reintroducing conscription to beef up its out-matched army.
In Washington, President Barack Obama's spokesman Jay Carney said Moscow's demand, delivered by Mr Putin to German Chancellor Angela Merkel in a call earlier this week, was absurd.
"That was a rather remarkable statement by a senior Russian government official ... who called on Ukraine to remove its forces from its country, which is preposterous, if you think about it," he said.
Ms Merkel is to meet Mr Obama in Washington tomorrow, with Ukraine at the top of their agenda.
Mr Carney brushed off reports of differences between Europe and the US on how to handle the crisis.
Europe has closer trade ties with Russia than does the US, and EU leaders reportedly fear that harsh sanctions could drive up energy costs in their already weak economies.
But Mr Carney said: "We expect to continue a path that sees an international coalition escalating the costs that Russia will have to endure and pay if Russia refuses to keep its commitments."
Meanwhile, Ukraine is bringing back military conscription with immediate effect to deal with a spreading pro-Russia insurgency in its east.
A decree announcing the measure was issued this afternoon by interim president Oleksander Turchynov.
The measure was being taken "given the deteriorating situation in the east and the south ... the rising force of armed pro-Russian units and the taking of public administration buildings ... which threaten territorial integrity," Mr Turchynov's office said.
Ukraine's parliament voted on 17 April to "recommend to the acting president to restart conscription into the Ukraine armed forces without delay".
It said the action was needed in order to "bolster Ukraine's defence capabilities in connection with aggression from the Russian Federation".
Ukraine scrapped compulsory military service for young men only this year, under a law introduced in 2013 by Viktor Yanukovych, the Kremlin-friendly president who ended up fleeing mass pro-Western demonstrations two months ago.
Ukraine currently has 130,000 personnel in its armed forces.
With reserves, this could be boosted to around 1,000,000.
The move came after Mr Turchynov said the Western-backed authorities in Kiev were "powerless" to stop pro-Russian separatists in the east from taking over public buildings.
The West and Ukraine believe that the unrest is being fomented by Russia in a bid to destabilise the former Soviet Republic ahead of planned presidential elections on 25 May.
Earlier today, Interfax-Ukraine news agency reported that Pro-Russian protesters had stormed a prosecutor's office in the separatist-held city of Donetsk, lobbing petrol bombs and stones.
The violence broke out when protesters gathered outside the office accusing the prosecutors of working for the pro-Western government in Kiev, which Donetsk is threatening to break from in a referendum on 11 May.
Protesters entered the building, and television pictures showed police filing out.
Meanwhile, Ukraine has ordered the expulsion of Russia's military attaché.
It said it had caught him "red-handed" receiving classified information on the country's cooperation with NATO during an armed uprising Kiev says is directed from Moscow.
The Foreign Ministry said today the diplomat had been detained a day earlier and declared "persona non grata".
Ukraine's security service said he was a Russian intelligence officer who had been collecting intelligence on "Ukrainian-NATO military and political cooperation".
"On 30 April, he was caught red-handed receiving classified material from his source," said Maryna Ostapenko, a spokeswoman for Ukraine's security service, the SBU.
She described the source as a colonel in the Ukrainian armed forces.
Source: RTÉ News