Washington is considering “serious sanctions” against Russia for undermining a European-brokered truce in eastern Ukraine, US secretary of state John Kerry says.
Mr Kerry said US president Barack Obama would make a decision “in the next few days” in response to the breach of a ceasefire.
The Ukrainian military accused Russia on Friday of sending tanks and troops into eastern Ukraine despite a ceasefire that went into force last Sunday.
The Kremlin did not immediately respond to the allegation, but has always denied accusations in the past that its forces are fighting in Ukraine.
Mr Kerry said the US “knows to a certainty” of Russia’s involvement in the conflict and the support it was giving to the separatists.
“Russia has engaged in an absolutely brazen and cynical process over these last days,” Mr Kerry said.
“I anticipate that president Obama will evaluate the choices that are in front of him and will make his decision as to what the next step will be.
“There are serious discussions taking place between us and our European allies as to what those next sanction steps ought to be and when they ought to be implemented.”
Mr Kerry said the most “egregious violation” of the ceasefire was the assault on the city of Debaltseve on Wednesday and military supplies sent by Moscow to separatists
“If this failure continues, make no mistake, there will be further consequences, including consequences that will put added strains on Russia’s already troubled economy,” he said.
Kiev and rebels take part in prisoner exchange
Mr Kerry, who was speaking after meetings with his British counterpart Philip Hammond in London, said Russia and the rebels were only complying with the ceasefire accords in a few areas.
Pro-Russian separatists are building up forces and weapons in Ukraine’s south east and the Ukrainian military said it was braced for the possibility of a rebel attack on the port city of Mariupol.
Kremlin spokesman Dmitry Peskov told Russian media that Moscow was focused on supporting the ceasefire deal, according to TASS news agency.
The United Nations estimates 5,700 people have died since the conflict began 10 months ago.
Under the truce, both sides are meant to observe a ceasefire, withdraw heavy weapons from the frontline by March 3 and carry out a prisoner exchange.
AFP journalists in Ukraine’s eastern frontline town of Zholobok saw 139 Ukrainian soldiers traded for 52 separatist fighters late on Saturday.
Some of the released soldiers were wounded. A few had to walk on crutches through a landscape scarred and cratered by months of fighting.
The rebels said the prisoners included some troops seized this week when they overran the strategic town of Debaltseve, located between Lugansk and the other rebel stronghold of Donetsk.
Thousands attend Moscow pro-Putin rally
Tens of thousands of pro-Kremlin activists took to the streets of central Moscow on Saturday vowing to prevent a Ukraine-style uprising in Russia.
The demonstrators, some dressed in fatigues, waved Russian flags and many sported the black and orange St George ribbon, a symbol of victory over Nazi Germany that pro-Russian Ukrainian separatists have adopted as their badge of honour.
Police said up to 40,000 people turned out and around 1,000 attended a similar rally in the second city of Saint Petersburg. Critics claimed many were paid to attend or bussed in.
“I am calling on you to rally around the Russian president at a time when all of Russia’s enemies are mobilising,” Alexander Zaldostanov, the leather-clad leader of biker gang the Night Wolves, told the rally.
One of the movement’s leaders, Nikolai Starikov, said the march was their first major rally aimed at discouraging the pro-Western opposition from plotting a coup in Russia.
“Don’t even try. Don’t make any attempts to rock the boat in Russia,” he said in televised remarks.
Meanwhile, Ukraine’s ousted leader Viktor Yanukovych, who lives in Russia sheltered from prosecution back at home, said he would like to return to his country as soon as he can.
“I’ll be back and will do everything in my power to make life easier in Ukraine,” he told Russia’s Channel One in an excerpt of interview which will be broadcast in its entirety on Monday.