The G-7 comprises Canada, France, Germany, Italy, Japan, UK and US.
The President of the European Council and the President of the European Commission also signed the joint statement issued by G-7 countries, hours after US President Barack Obama spoke with leaders of Germany, France, Britain and Italy.
"We have now agreed that we will move swiftly to impose additional sanctions on Russia. Given the urgency of securing the opportunity for a successful and peaceful democratic vote next month in Ukraine's presidential elections, we have committed to act urgently to intensify targeted sanctions and measures to increase the costs of Russia's actions," the joint statement said.
In the statement, the leaders expressed their deep concern at the continued efforts by separatists backed by Russia to destabilize eastern Ukraine and their commitment to taking further steps to ensure a peaceful and stable environment for the May 25 presidential election.
"We welcomed the positive steps taken by Ukraine to meet its commitments under the Geneva accord of April 17 by Ukraine, Russia, the European Union, and the United States," they said.
These actions include working towards constitutional reform and decentralisation, proposing an amnesty law for those who peacefully leave the buildings they have seized in eastern Ukraine, and supporting the work of the Organization for Security and Cooperation in Europe (OSCE).
The government of Ukraine has acted with restraint in dealing with the armed bands illegally occupying government buildings and forming illegal checkpoints, they said and added that in contrast, Russia has taken no concrete actions in support of the Geneva accord.
"It (Russia) has not publicly supported the accord, nor condemned the acts of pro-separatists seeking to destabilize Ukraine, nor called on armed militants to leave peacefully the government buildings they've occupied and put down their arms.
"Instead, it has continued to escalate tensions by increasingly concerning rhetoric and ongoing threatening military manoeuvres on Ukraine's border," the statement said.
"We reiterate our strong condemnation of Russia's illegal attempt to annex Crimea and Sevastopol, which we do not recognize. We will now follow through on the full legal and practical consequences of this illegal annexation, including but not limited to the economic, trade and financial areas," they said.

Earlier in the day, Obama spoke with President Francois Hollande of France, Chancellor Angela Merkel of Germany, Prime Minister Matteo Renzi of Italy, and UK Prime Minister David Cameron about the alarming situation in eastern Ukraine.
"The leaders noted the positive steps that Ukraine had taken to move forward on the actions to which it committed in the April 17 joint statement by Ukraine, Russia, the European Union, and US.
"These including proposing an amnesty law for those who will peacefully leave the buildings they have seized in eastern Ukraine, supporting the work of the Organization for Security and Cooperation in Europe (OSCE), and committing themselves once again to a process of constitutional reform and decentralization," a White House statement said.
The leaders also agreed that Russia had not reciprocated – including by not publicly supporting the Geneva accord, nor calling on armed militant groups to lay down their arms and leave the government buildings occupied – and had in fact continued to escalate the situation through its increasingly concerning rhetoric and threatening military exercises on Ukraine's border, the statement said.
The White House said, Obama noted that US is prepared to impose targeted sanctions to respond to Russia's latest actions.

"The leaders agreed to work closely together, and through the G7 and European Union, to coordinate additional steps to impose costs on Russia. The leaders underscored that Russia could still choose a peaceful resolution to the crisis, including by implementing the Geneva accord," it said.


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