Obama decries 'thugs' in Ukraine, Russian 'provocation'

Obama also made his first public comments on new international sanctions due to come into force early in the week against Russia, saying they were a punishment for Moscow's "provocation" in eastern Ukraine.

Obama weighed in on the deepening crisis from Malaysia after a group of Organisation for Security and Cooperation (OSCE) observers were detained by pro-Moscow rebels who branded them spies.

He said that among steps Russia should take was to work with "international observers rather than stand by while they are being bullied and in some cases detained by these thugs."

The observers were seized by rebels in the flashpoint town of Slavyansk which is under siege by the Ukrainian military.

Obama said that the new sanctions being drawn up by G7 countries were a new sign to Russia that it must embrace a diplomatic solution to the crisis, following the failure of the Geneva agreement designed to reduce tensions.

'Destabilising activities'

"It is important for us to take further steps sending a message to Russia that these kinds of destabilising activities taking place in Ukraine have to stop," Obama said.

Obama spoke a day after G7 nations said that they would impose new sanctions on Russia within days, accusing Moscow of doing nothing to honour an agreement forged in Geneva aimed at easing tensions in Ukraine.

"So long as Russia continues down a path of provocation rather than trying to resolve this issue peacefully and de-escalate it, there are going to be consequences and those consequences will continue to grow," Obama said.

He also defended his decision to wait for European partners -- which have far more exposure to Russian trade and investment than the United States -- before unveiling another set of sanctions.

"The more we are united, the more effective it is going to be," Obama said.

US officials say the next set of sanctions will target key officials in the energy and banking sectors who they say are "cronies" with significant influence on Russian President Vladimir Putin.

Previous sanctions linked to Russia's annexation of Crimea imposed visa and travel banks on key political figures around Putin and on a Russian bank.

Washington says that it will not move on to direct sanctions on key sectors of the Russian economy itself unless Moscow's forces roll over the border into Ukraine.

Obama said Sunday that if that should happen, he is confident European states would come on board, despite the political and economic costs such action would entail.

"If in fact we need to move forward with sectoral sanctions, then it is going to be important that we know exactly what we are prepared to do and sustain over the long haul and our European partners know what they are willing and able to do as well," he said.

Some domestic critics of the president have complained that has been sluggish in upping costs for Russia over Ukraine and say he should have gone ahead with tougher measures without waiting for Europe.

While Obama was in Asia, US Secretary of State John Kerry told his Russian counterpart Sergei Lavrov that Washington was concerned about "provocative" troop movements along Russia's border with Ukraine and its support for the separatists, which he said "are undermining stability, security and unity in Ukraine".

Russian and Ukrainian officials meanwhile sparred over reports that Moscow's warplanes had violated Ukrainian airspace.