Armed pro-Russia groups remain in control of seized buildings in eastern Ukraine. Photo taken from BBC
The G7 group of economic powers has agreed to intensify sanctions on Russia over its actions in Ukraine.
A G7 statement gave no detail of the sanctions, but US officials said they could announce measures by Monday.
The West accuses Russia of leading a secession rebellion in Ukraine's east, months after it annexed Crimea. Moscow denies the allegations.
Meanwhile, negotiators are trying to secure the release of international observers seized by pro-Russia gunmen.
Forces in the city of Sloviansk are still holding the eight European military observers and several Ukrainian army personnel who they seized yesterday and accuse of espionage.
The observers were taking part in a mission linked to the Organisation for Security and Co-operation in Europe (OSCE).
JETS 'VIOLATED AIR SPACE'
Rebel militia continue to occupy official buildings in a dozen eastern cities, defying the government in Kiev.
Russia has tens of thousands of troops deployed along its side of the border with Ukraine and has said it would act if its interests were threatened.
The US accused Russian jets of violating Ukraine's airspace on Friday in a further sign of escalation.
Pentagon spokesman Col Steven Warren said Russian aircraft had entered Ukrainian airspace several times in the past 24 hours.
He gave no further details, but called on Moscow to take "immediate steps to de-escalate the situation".
Meanwhile, the G7 praised Ukraine for acting with restraint in dealing with the "armed bands" that had occupied government buildings.
But the group, which includes the US, UK, Germany, Japan, France, Canada and Italy, condemned Russia's "increasingly concerning rhetoric and ongoing threatening military manoeuvres".
"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," said the statement.
White House sources told reporters that sanctions could be in place as early as Monday.
It is unclear what form they will take. Under current US and EU measures, assets freezes and travel bans have targeted a number of Russian officials.
MAPS 'SHOWED CHECKPOINTS'
On Friday, Ukraine's interior ministry said armed separatists had seized seven representatives from the Organisation for Security and Co-operation in Europe (OSCE), as well as five Ukrainian army personnel and a bus driver.
The OSCE group members were believed to be military observers from Germany, Denmark, Poland, Sweden and the Czech Republic.
Pro-Russian leaders in Sloviansk confirmed the bus had been stopped near the town of Sloviansk and said they were checking the identities of those on board.
The self-proclaimed mayor of Sloviansk, Vyacheslav Ponomaryov, said at least one passenger had been carrying maps showing separatist checkpoints in the area, which suggested "their involvement in espionage".
Last weekend, Ponomaryov broadcast an appeal to President Putin asking for Russian troops to protect the city from "fascists" after three of his men died in a gunfight.