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G7 agrees on new Russia sanctions
The G7 has agreed to impose new sanctions on Russia over Ukraine, accusing Moscow of flouting the deal struck to defuse the crisis.
The powerful group of nations said the "costs" for President Vladimir Putin of action in the east of the country was already "significant" and would now increase.
In a statement, David Cameron, Barack Obama and counterparts from Germany, France, Italy, Japan, and Canada expressed "deep concern at the continued efforts by separatists backed by Russia to destabilise eastern Ukraine".
They praised the "restraint" of the government in Kiev and the efforts it had made to implement the agreement struck in Geneva earlier this month.
In contrast, Moscow had taken "no concrete actions in support of the Geneva accord" and had not condemned pro-Russia militants or urged them to leave buildings they have been occupying.
The statement added: "We reiterate our strong condemnation of Russia's illegal attempt to annex Crimea and Sevastopol, which we do not recognise.
"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.
"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 move follows an intense round of diplomacy yesterday, including a conference call between president Obama and the European leaders.
Public exchanges between the sides have been becoming increasingly bitter, with Moscow's foreign minister Sergey Lavrov accusing the West of plotting to control Ukraine.
He said pro-Moscow insurgents in the south east of the country would lay down their arms only if the Ukrainian government cleared the Maidan protest camp in the capital Kiev.
"The West wants - and this is how it all began - to seize control of Ukraine because of their own political ambitions, not in the interests of the Ukrainian people," Mr Lavrov said.
But US secretary of state John Kerry said: "For seven days, Russia has refused to take a single concrete step in the right direction.
"Not a single Russian official, not one, has publicly gone on television in Ukraine and called on the separatists to support the Geneva agreement, to support the stand-down, to give up their weapons, and get out of the Ukrainian buildings."
Ukrainian prime minister Arseniy Yatsenyuk has accused Russia of wanting to start "a third world war". There are reports that Russian jets have been violating Ukrainian airspace.
The agreement struck between Moscow and Ukraine in Geneva last week was hailed as a breakthrough, and called for all parties to down arms and vacate public buildings.
Pro-Russian militia have been occupying government buildings in more than 10 cities in eastern Ukraine while the nationalist Right Sector movement is still in control of two public buildings in Kiev.
Shadow foreign secretary Douglas Alexander said: "After signing the Geneva accord earlier this month, Russia has since failed to act on its commitments within the agreement, and has taken no public steps to help de-escalate the situation in eastern Ukraine.
"Given Russia's continued actions, the G7 is right to now prepare broader sectoral measures in order to increase the economic and financial cost to Russia of its actions to support the destabilisation of eastern Ukraine. As a set of specific measures are outlined in the days ahead, the UK Government should ensure that those further steps are coordinated effectively by EU and G7 countries.
"The priority now must be avoiding an escalation in the region and securing conditions in which upcoming Presidential elections in Ukraine can take place without the risk of further violence."