The European Union and United States threatened on Monday to impose sanctions against Russia unless Moscow withdraws its armed forces from Ukraine’s Crimea peninsula and takes steps to reduce tensions.

The EU threatened to suspend visa liberalisation talks with Russia, and US President Barack Obama spoke of a series of diplomatic and economic steps that will “isolate Russia and have a negative impact on the Russian economy” and its status in the world if Moscow continues on the current path.

Russia is “on the wrong side of history” in Ukraine, Obama said, urging Moscow to choose diplomacy over force.

The US said it was preparing unspecified political and economic sanctions. “It is likely that we will put (sanctions) in place,” State Department spokeswoman Jen Psaki told reporters in a telephone briefing.

The US is looking for the best way to hold people accountable for violence and send an economic message, Psaki said, considering factors including whether Moscow proceeds with its military intervention, draws back troops or engages diplomatically with Ukraine.

Russian Foreign Minister Sergei Lavrov on Monday defended the incursion into Crimea.

“This is a question of defending our citizens and compatriots, and ensuring human rights, especially the right to life,” Lavrov told the UN human rights council in Geneva. “It is gravely important to disassociate ourselves from extremists who seek illegally to gain control over the situation, nurturing violence and open terror.”

Russia's international ties

NATO plans to hold a second meeting on Tuesday over Ukraine. Poland requested the talks under Article 4 of the military alliance’s charter, which a NATO member can invoke if it feels threatened.

US Secretary of State John Kerry is to fly on Tuesday to Kiev, while EU foreign policy chief Catherine Ashton is expected to meet with Lavrov in Madrid, before travelling on Wednesday to Ukraine.

Ashton said that the bloc’s foreign ministers meeting in Brussels discussed that the potential suspension of talks on visa matters.

“In the absence of de-escalating steps by Russia, the EU will decide what the consequences will be for bilateral relations between the EU and Russia,” Ashton said.

Talks on a wide-ranging EU-Russia cooperation agreement, in the pipeline since 2008, could be affected, she said. Decisions could come at an EU emergency summit on Ukraine, planned for Thursday.

The US Defence Department late on Monday announced a freeze of direct military relations with Russia, including exercises, port visits and meetings.

“We have, in light of recent events in Ukraine, put on hold all military-to-military engagements between the United States and Russia,” said Rear Admiral John Kirby, Pentagon spokesman.

He said the Pentagon was “closely monitoring” the situation and urged Russian forces in Crimea to return to their bases. Citing speculation about US ship movements in the region, Kirby said there was “no change to our military posture in Europe or the Mediterranean,” and routine, planned naval exercises are continuing.

Russian military intervention in Ukraine

At an emergency meeting of the UN Security Council in New York, Russian ambassador Vitaly Churkin said that deposed Ukrainian President Viktor Yanukovych had called on Moscow to protect people from the “grip of outright terror” by extremists fuelled by the West.

“I call on the president of Russia, Mr Putin, asking him to use the armed forces of the Russian Federation to establish legitimacy, peace, law, order, stability and defending the people of Ukraine,” Churkin quoted from a Saturday letter from Yanukovych.

UN ambassadors from the United States and Britain called the explanation a “bogus justification” and said the seizure is a “violation of international law.” Some 16,000 Russian troops are in Crimea, Ukrainian Ambassador Yuriy Sergeyev told the Security Council, calling their presence an illegal occupation and suggesting that military preparations around the Russian border indicate possible intervention into other eastern regions of Ukraine.

Yanukovych, a close Moscow ally whose political base was in Russian-speaking southern and eastern Ukraine, fled Kiev last month after months of anti-government demonstrations. The opposition formed an interim government after the Ukrainian Parliament voted to remove him from office and hold new elections.

Moscow says it ordered forces into Crimea in response to a request by the pro-Russian regional prime minister for help to keep “peace and calm” on the Black Sea peninsula.

The occupation has been condemned by the EU and the US. On Sunday, seven of the world’s leading industrialised nations jointly vowed to halt preparations for a planned G8 summit to be hosted by Russia in June.

French President Francois Hollande and British Prime Minister David Cameron telephoned on Monday evening about the Ukraine crisis, emphasising the earlier message from EU foreign ministers about “possible adoption of measures targeting EU-Russian relations in the absence of a military de-escalation,” according to the French presidency.

Deepening fears about war in Ukraine were unnerving financial markets, with European and Russian shares tumbling and oil and gold prices jumping.

Crimea is inhabited mainly by ethnic Russians. Tatars, a Turkic ethnic group who were forcibly deported under Soviet dictator Joseph Stalin, today make up 12 per cent of the region’s almost 2 million inhabitants. Some 200,000 ethnic Bulgarians live in Crimea, too.

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