G7 leaders warn Russia of fresh sanctions over Ukraine

Barack Obama: "If Russia's provocation continues, the G7 nations are ready to impose additional costs"

Leaders of the G7 industrial nations meeting in Brussels say they are prepared to impose further sanctions on Russia over its actions in Ukraine.

A joint statement condemned Moscow for its "continuing violation" of Ukraine's sovereignty.

The G7 summit is the first since Russia was expelled from the group following its annexation of Crimea in March.

On Thursday, leaders are discussing the global economic outlook, climate change and development issues.

Although Russian President Vladimir Putin is not at the Brussels summit, he will hold face-to-face talks with some G7 leaders - not including US President Barack Obama - in Paris afterwards.

However, both Mr Putin and Mr Obama will attend a ceremony commemorating the 70th anniversary of the D-Day landings in France on Friday.

While in Poland on Wednesday, President Obama warned Moscow against what he called its "dark tactics" in Ukraine.

Barroso: "This democratic club... does not accept the Russia of Vladimir Putin"

Diplomacy has intensified to try to resolve the biggest crisis in years between Russia and the West, says the BBC's Chris Morris in Brussels.

'Cynicism without limit'

In response to the G7 statement on Ukraine, Russian Prime Minister Dmitry Medvedev has accused the world leaders of "cynicism without limit" for calling the Ukrainian government's military campaign against separatists in the east "measured action".

G7 leaders gathered in Brussels on Wednesday evening for the opening dinner of the summit, which was originally due to be held in the Russian city of Sochi.

"We are united in condemning the Russian Federation's continuing violation of the sovereignty and territorial integrity of Ukraine," they said in a joint statement.

German Chancellor Angela Merkel told reporters: "We can't afford a further destabilisation of Ukraine."

"We have made clear that we want to continue with our three-step approach - support Ukraine in economic issues, talks with Russia, and should there no progress on all those issues... the possibility of sanctions, tougher sanctions, remains on the table," she said.

During a speech in Warsaw to mark 25 years since the fall of communism in Poland, President Obama condemned what he called Russian "aggression" in eastern Ukraine.

US President Barack Obama: "We stand together now and forever, for your freedom is ours"

"How can we allow the dark tactics of the 20th Century to define the 21st?" he said.

Mr Obama also met Ukraine's President-elect Petro Poroshenko in Warsaw, and pledged $5m (£3m) of military assistance to Kiev including body armour and night-vision goggles.

Mr Poroshenko, a billionaire sweet manufacturer, was elected in May.

He will be at the D-Day commemorations ahead of his inauguration on Saturday and said he did not rule out meeting Mr Putin.

Ukraine President-elect Petro Poroshenko and US President Barack Obama in Warsaw, 4 June 2014. Mr Obama met Mr Poroshenko, and called him a "wise selection" for leader of Ukraine

Mr Putin told French TV he was "not going to avoid any of them" but said Mr Poroshenko needed to be serious about a dialogue with factions in eastern Ukraine.

"I think Mr Poroshenko has a unique opportunity. He still doesn't have blood on his hands. He still can stop this reprisal operation and start a direct dialogue with citizens of the south and the east of his country," he said.

Meanwhile, on the ground in Ukraine, separatist rebels have taken two military bases in the eastern region of Luhansk.

The chairman of the Donetsk People's Republic told the BBC's Steve Rosenberg there was a full-scale civil war going on in Ukraine

Separatists seized a border guard base after days of combat, and a National Guard base after an attack which began on Tuesday.

Fighting continues near the towns of Krasny Liman and Sloviansk in neighbouring Donetsk region.

Ukrainian sources say rebels are trying to break out of encirclements by government forces.

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