'Putin on doomed drive to recreate Soviet glories'

US President Barack Obama accused Russian President Vladimir Putin of wrecking Russia's economy in a doomed drive to recreate the glories of the Soviet empire and G7 leaders said they could step up sanctions against Moscow if violence in Ukraine escalated.

At the conclusion of a Group of Seven summit in the Bavarian Alps, leaders expressed concern about an upsurge in fighting in eastern Ukraine, where Russian-backed separatists have clashed with Kiev's troops in violation of a ceasefire agreed in April.

Tap Here to Add The Daily Star As A Trusted Source

The strongest rhetoric came from Obama, who told a news conference the Russian people were suffering severely because of Putin's policies.

It was the second summit of the group of leading industrial nations to exclude Russia since Putin was frozen out of what used to be the G8 after Moscow's annexation of Crimea last year, a move the G7 condemned in their communique as "illegal".

"He's got to make a decision," Obama said of Putin. "Does he continue to wreck his country's economy and continue Russia's isolation in pursuit of a wrong-headed desire to recreate the glories of the Soviet empire, or does he recognise that Russia's greatness does not depend on violating the territorial integrity and sovereignty of other countries."

German Chancellor Angela Merkel, the summit host, who has led diplomacy to engage Putin in a diplomatic solution to the conflict, told reporters that sanctions against Russia could be lifted if Moscow and the separatists fully implemented a peace deal struck in the Belarus capital Minsk earlier this year.  But she added that Europe and the United States were also prepared to toughen sanctions. German officials said this would be necessary if separatists seized more territory in eastern Ukraine, especially around the strategic port city of Mariupol.