EU said top officials from its 28 member states would meet on Monday seeking to adopt an additional list of sanctions, likely to include asset freezes and travel bans. (Agencies)
European powers are working in tandem with United States and the rest of the G7 group of leading economies which agreed over the weekend to impose new sanctions on Russia after Kiev accused Moscow of seeking to trigger a "third world war".
The G7 grouping includes EU heavyweights Britain, France, Germany and Italy as well as Canada and Japan.
A senior US official said the new sanctions will target Russia's defence industry as well as individuals and companies close to Russian President Vladimir Putin.
US President Barack Obama, on an Asian tour, stressed the need for a unified response to isolate Russia.
It is vital to avoid "falling into the trap of interpreting this as US is trying to pull Ukraine out of Russia's orbit, circa 1950. Because that's not what this is about," he said.
"We're going to be in a stronger position to deter Putin when he sees that the world is unified and United States and Europe are unified, rather than this is just a US-Russian conflict," Obama added.
US and EU have already targeted Putin's inner circle with visa and asset freezes and imposed sanctions on a key Russian bank. However, former Russian tycoon Mikhail Khodorkovsky said they would have "no short-term effect" on the Russian economy.
In Ukraine, pro-Russian militants presented a captured team of international observers as "prisoners of war" on Sunday, further raising the stakes in the crisis.
The self-styled mayor of rebel-held Slavyansk, which has become the epicentre of the crisis, led eight European members of an OSCE military inspection mission before scores of local and foreign journalists in the town hall.
With four armed rebels watching over him, a spokesman for the group, German officer Axel Schneider, said the team was in good health and stressed they were "OSCE officers with diplomatic status".
"I cannot go home of my own free will," he told reporters.
EU said top officials from its 28 member states would meet on Monday seeking to adopt an additional list of sanctions, likely to include asset freezes and travel bans.