Pro-Russian armed men stand guard next to a tank at a checkpoint in the eastern Ukrainain city of Slavyans.

Pro-Russian armed men stand guard next to a tank at a checkpoint in the eastern Ukrainain city of Slavyans. Photo: AFP

The Group of Seven rich countries have agreed to start slapping fresh sanctions on Moscow as early as Monday over the worsening Ukraine crisis amid Western fears of an imminent Russian invasion.

International negotiators rushed to eastern Ukraine on Saturday to seek the release of European military monitors who were captured on Friday and promptly branded "spies" by the pro-Russia militia that seized them.

The detention of the monitors instantly raised the stakes in an already fraught drama pitting the Ukrainian government against motley bands of separatists who have overtaken city halls across the country's eastern half.

Although the standoff in Ukraine has for months been a proxy fight between Russia and the West, the imprisonment in a makeshift separatist jail of military officers from NATO countries threatens to draw the West more directly into the conflict.

The Organisation for Security and Co-operation in Europe, which is monitoring events in Ukraine and trying to broker local peace deals, said it would keep its monitors out of Slovyansk until further notice, and that it was carefully watching conditions in other cities.

"It's a very fluid security situation in a lot of these areas," said Michael Bociurkiw, spokesman for the OSCE monitoring mission. "We're definitely taking more precautions."

International tensions were also stoked in the ex-Soviet republic, where sporadic fighting between pro-Kremlin rebels and Ukrainian security forces flared this week.

Russian warplanes violated Ukraine's airspace several times on Thursday and Friday, the Pentagon said.

Russia has also begun new drills on the border, where it has tens of thousands of troops massed.

A Western diplomat warned: "We no longer exclude a Russian military intervention in Ukraine in the coming days."

The diplomatic source noted that Russia's UN envoy, Vitaly Churkin, had been recalled to Moscow for urgent consultations.

Russia said Saturday that it would do all it could to win the release of the detained men, who include a total of eight military monitors from Germany, the Czech Republic, Poland, Denmark and Sweden as well as five Ukrainian military escorts. But as of Saturday night, leaders of the self-proclaimed Donetsk People's Republic in the city of Slovyansk remained adamant that they had no intention of freeing the officers, accusing them of espionage. Ukrainian officials said they feared that the men would be used as human shields.

The standoff raised fresh questions about the ability of any government - whether Ukrainian or Russian - to control events in a region where security is perilous, and where shadowy militias hold growing sway.

A barricade around the building where the OSCE team was being held had been greatly fortified with sandbags and a machine-gun.

Washington and Europe called for the immediate release of the OSCE team, which includes members from Germany, Sweden, Denmark, Poland, the Czech Republic and Bulgaria.

German Foreign Minister Frank-Walter Steinmeier has urged his Russian counterpart, Sergei Lavrov, to intervene to have the team freed, officials in Berlin said.

Russia responded it would do everything in its power to win their release.

Kiev has accused Moscow - which it sees as controlling the rebels - of seeking to trigger a "third world war" and urged Russian troops to withdraw from the border.

Russia in turn has warned it has a "right" to invade to protect Ukraine's Russian-speaking population concentrated in the east and southeast, sparking the worst East-West confrontation since the Cold War.

The G7 nations said in a joint statement they would "move swiftly to impose additional sanctions on Russia".

"These sanctions will be coordinated and complementary, but not necessarily identical. US sanctions could come as early as Monday," a senior US administration official said.

The Group of Seven consists of the United States, Britain, Canada, France, Germany, Italy and Japan. European Union foreign ministers are also to meet soon to discuss the issue.

The US and the EU have already targeted Russian President Vladimir Putin's inner circle with visa and asset freezes and imposed sanctions on a key Russian bank.

A senior White House official said the next round of sanctions could target "individuals with influence on the Russian economy, such as energy and banking".

AFP, Washington Pos