President Barack Obama announced new economic sanctions against key sectors of the Russian economy Tuesday afternoon, in Washington's latest move to force Russian President Vladimir Putin to end his support for Ukrainian rebels.
Obama says the sanctions target Russia's energy, weapons and finance industries, including big banks.
"If Russia continues on this current path, the costs on Russia will continue to grow," Obama said. "Because we are closely coordinating our actions with Europe, the sanctions we are announcing today will have an even bigger bite."
The measures mark the start of a new phase in the biggest confrontation between Moscow and the West since the Cold War. Tensions worsened dramatically after the downing of Malaysia Airlines Flight MH17 over rebel-held Ukrainian territory on July 17 by what Western countries say was a Russian-supplied missile fired by the rebels.
Diplomats said ambassadors from the 28-member European Union agreed to restrictions on trade in equipment for the oil and defense sectors and in "dual use" technology with both military and civilian purposes. Russia's state-run banks would be barred from raising funds in European capital markets. The measures would be reviewed in three months.
But Australia's prime minister said Wednesday that he is not considering adding new sanctions. Australia lost 28 citizens on Flight MH17 and sponsored a United Nations Security Council resolution that was passed with Russian support. The resolution demands the rebels allow the dead to be retrieved and international investigators free access to the crash site, which recent fighting has prevented.
Prime Minister Tony Abbott said that at the moment "our focus is not on sanctions; our focus is on bringing home our dead as quickly as we humanly can."
The Ukrainian government said Monday its troops had regained more territory from the rebels and were moving toward the crash site, which international investigators said they could not reach because of the fighting.
Troops recaptured two rebel-held towns near the site and were trying to take the village of Snezhnoye, near where Kiev and Washington say rebels fired the surface-to-air missile that shot down the airliner, Ukrainian officials said.
One pro-government militia said 23 of its men had been killed in fighting in the past 24 hours, and a rebel commander said he had lost 30 soldiers.
In a report on three months of fighting between government forces and separatist rebels who have set up pro-Russian "republics" in the east, the United Nations said more than 1,100 people had been killed.
U.N. High Commissioner for Human Rights Navi Pillay said increasingly intense fighting in the Donetsk and Luhansk regions was extremely alarming, and the shooting down of the airliner may amount to a war crime.
The separatists are still in control of the area where MH17 was shot down, but fighting in the surrounding countryside has been heavy as government forces try to drive them out.
On Monday at least three civilians were reported killed in overnight fighting, and Kiev said its troops recaptured Savur Mogila — a strategic piece of high ground about 20 miles from where the Malaysia Airlines Boeing plane came down — and other areas under rebel control. Rebels denied Savur Mogila had been lost, saying fighting was continuing.
The crash site has yet to be secured or thoroughly investigated. After days in which bodies lay untended in the sun, rebels gathered the human remains and shipped the bodies out by train.
But the wreckage itself is still largely unguarded, and much of it has been moved or dismantled in what the rebels say was part of the operation to recover the bodies. No full forensic sweep has been conducted to ensure all human remains have been collected. Both sides accuse the other of using fighting to prevent the investigation.
The Organization for Security and Cooperation in Europe said its observers attempting to reach the crash site with investigators from Australia and the Netherlands were forced to return to Donetsk for "security reasons."
A rebel leader, Vladimir Antyufeyev, told reporters in Donetsk that separatist fighters escorting the international experts to the site encountered fighting and turned back.
Antyufeyev, who like most of the senior rebel leadership is an outsider from Russia, also blamed the "senseless" Ukrainian army for trying to destroy evidence at the crash site under cover of fighting.
Analysis of black box flight recorders from the airliner showed it was destroyed by shrapnel from a missile blast that caused a "massive explosive decompression," a Ukrainian official said on Monday.
Investigators in Britain, who downloaded the data, had no comment. They said they had passed on information to the international crash investigation led by the Netherlands, whose nationals accounted for two-thirds of the victims.
Al Jazeera and Reuters