Russian President Vladimir Putin and his US counterpart Barack Obama agreed during a phone call on Friday the current standoff in Ukraine was not in the interest of their countries, the Kremlin said.
"The presidents agreed that the current situation is not in the interests of either country," said a Kremlin statement.
Obama also expressed his "deep concerns about Russia's increased support for the separatists in Ukraine," the White House said.
Obama repeated his concern about Moscow's alleged breach of the 1987 Intermediate-Range Nuclear Forces Treaty, under which the US and Russia agreed not to develop medium-range cruise missiles.
"The president reinforced his preference for a diplomatic solution to the crisis in Ukraine, and the two leaders agreed to keep open their channels of communication," a White House statement said.
Meanwhile in his first comments on sanctions after the US and EU earlier this week slapped the toughest punitive measures on Russia since the Cold War, Putin characterised them as "counterproductive, causing serious damage to bilateral cooperation and international stability overall."
However, the Kremlin said the two presidents agreed on the urgent need for an "immediate and stable halt to fighting in southeast Ukraine and the start of a political process."
They also agreed that tripartite contact group talks bringing together Ukraine, Russia and the Organization for Security and Cooperation in Europe (OSCE) which is monitoring the situation in Ukraine should continue.
Tripartite talks held on Thursday and yesterday in the Belarussian capital Minsk reached agreement on freeing 20 prisoners from each side, according to Ukraine's representative cited by Russian news agencies.
Russia's annexation of Crimea and a pro-Russian rebellion in eastern Ukraine that Washington accuses Moscow of supporting has led to the severest crisis in relations between Russia and the West in decades.
Meanwhile, Dutch and Australian experts gathered more remains from the crash site of downed flight MH17 in east Ukraine, as they scrambled to make up for lost time amid deadly clashes between government troops and pro-Russian rebels.
The Ukrainian military said an overnight ambush by insurgents in Shakhtarsk, a town 25 kilometres from the main impact site, left 14 people dead, including at least 10 soldiers.
Seventy police investigators finally managed to comb the scattered wreckage in the fields where the Malaysia Airlines plane was downed two weeks ago killing all 298 people on board.