CNN's Fred Pleitgen interviews the acting Prime Minister of Ukraine, Arseniy Yatsenyuk in Kiev, Ukraine on Thursday, April 17, 2014.
KIEV, Ukraine (CNN) - U.S. President Barack Obama threatened Russia on Friday with new sanctions over its actions in Ukraine as the Ukrainian Prime Minister also came out with tough words against Moscow.
Russian attempts to start conflict in Ukraine will lead to military conflict in Europe, Prime Minister Arseniy Yatsenyuk warned.
He also charged Russia with aiming to occupy his country "militarily and politically," and said Moscow wants to start a third world war.
His strong statement come amid a sharp escalation in tensions.
Russia's defense chief ordered new military drills Thursday near the border with eastern Ukraine after Ukrainian forces said they killed five pro-Russian militants in an operation to clear roadblocks near the city of Slavyansk.
Serhiy Pashinskiy, an aide to acting Ukrainian President Oleksandr Turchynov, said Friday that the operation had now entered its "second stage," aimed at encircling Slavyansk and cutting off additional supplies or support.
Yatsenyuk said he'd asked Russia to explain the presence of its troops on Ukraine's border within 48 hours -- but 24 hours later, Kiev is still waiting for an official response.
At the same time, he said, the world is lined up with Kiev in its efforts to restore stability and preserve "the system of world security that Russia wants to destroy."
Meanwhile, top U.S. officials have vowed more punitive international actions targeting Russia's economy if Moscow, in their view, continues to escalate the situation.
At a news conference Friday in South Korea, Obama said he would be talking to other European leaders about sanctions against Russia over Ukraine.
There will be targeted sanctions that are "ready to go," he said, echoing comments he made Thursday in Japan.
"I think it's important for us not to anticipate that the targeted sanctions that we're applying now necessarily solve the problem," he said.
"What we've been trying to do is continually raise the costs for Russia of their actions while still leaving the possibility of them moving in a different direction. And we will continue to keep some arrows in our quiver in the event that we see a further deterioration of the situation over the next several days or weeks."
Obama also praised the unity of other countries in condemning Russian "meddling" in Ukraine.
New sanctions 'an escalation'
According to senior U.S. officials, the additional sanctions could come as early as Friday.
In their sights: key Putin allies, high-profile Russian oligarchs and possibly Russian institutions and companies, the U.S. officials told CNN.
The new sanctions "will be an escalation," one official said.
U.S. Secretary of State John Kerry called Russia's actions in Ukraine "a full-throated effort to actively sabotage the democratic process through gross external intimidation."
"If Russia continues in this direction," he added, "it will not just be a grave mistake, it will be an expensive mistake."
Russia also ramped up its rhetoric Thursday.
President Vladimir Putin told Russian state media that "if the Kiev regime has started to use the army against the population inside the country, it, beyond any doubt, is a very serious crime."
This, he said, would have consequences for Ukraine's interim leaders and for relations between the two countries.
Moscow argues that the government in Kiev, which took power after ousted pro-Moscow President Viktor Yanukovych fled Ukraine in February, is illegitimate.
On Friday, the International Criminal Court said chief prosecutor Fatou Bensouda had opened a preliminary investigation into alleged crimes committed in Ukraine while Yanukovych was in power.
The investigation will look at the period from November 21 to February 22, when street protests against Yanukovych's government took place that resulted in bloody clashes with security forces.
Only a week has passed since foreign ministers for Ukraine, Russia, the United States and the European Union agreed to a deal in Geneva, Switzerland, aimed at easing the crisis.
But that pact, which called for all sides to refrain from violence and for illegal militia groups to disarm and leave occupied buildings, appears to have faltered, if not failed.
Pro-Russian militants remain holed up in government buildings in around a dozen cities in eastern Ukraine.
And efforts by the Ukrainian security services to dislodge them, in what it has termed an anti-terrorist operation, risk provoking more violence or perhaps direct Russian intervention.
Although Ukraine's Interior Ministry said five pro-Russian militants died in the operation Thursday near Slavyansk, separatists who spoke to CNN at one of the targeted roadblocks said only one person had died, from a sniper shot.
Slavyansk has been at the center of much of the tension seen so far.
Pashinskiy, the President's aide, said Friday that the militants there were equipped with new Russian weapons and that intelligence overnight indicated they had set up bases in a kindergarten and hospital.
The evidence suggests, he said, "that terrorist actions in the east are directly managed by Russian special agents, that there are acting Russian troops in Slavyansk and that the so-called separatist groups are being coordinated by Russia directly."
Nearby in Kramatorsk, Russia's state-run RIA Novosti news agency reported gunfire at an airfield that Ukrainian forces retook from separatist protesters this month.
The head of Ukraine's anti-terror operations unit, Vasil Krutow, told CNN that a helicopter at the airfield had exploded after a shot hit its fuel tank. He said the crew's commander was injured as a result.
An explosion was also reported overnight at a police checkpoint in the southwestern city of Odessa.
The United States has accused Russia of supporting, arming and coordinating the separatist militants -- an allegation Moscow denies, saying these are simply local "self-defense" units.
Russia in turn accuses the United States of "running the show" in Ukraine and says it must do more to hold Kiev to its side of the Geneva deal, saying the interim government must disband right-wing ultranationalist groups.
Obama said Friday that the Ukrainian government had been acting in accordance with the Geneva agreement, including offering amnesty to those who will lay down their arms.
"What we have not seen is Russia speaking out clearly, condemning the pro-Russian militias that have taken over these buildings," he said.
Kerry sounded a similar note Thursday, praising what he called positive efforts by Ukraine's government to implement the Geneva deal while rapping Moscow for having "refused to take a single concrete step in the right direction."
He pointed to "peaceful protesters ... armed with grenade launchers and automatic weapons," self-defense group members wearing "brand new matching military uniforms and speaking in dialects that every local knows comes from thousands of miles away" and the reported arrests of Russian intelligence operatives in Ukraine.
Kerry: Window closing
Kerry warned that the "window to change course is closing" for Russia -- and that its leaders face a choice.
"If Russia chooses the path of de-escalation, the international community -- all of us -- will welcome it. If Russia does not, the world will make sure that the cost for Russia will only grow," he said.
Unless and until the additional U.S. sanctions are announced, it's hard to judge how much they will hurt Russia. Previous rounds targeted individual lawmakers and businessmen seen as close to Putin as well as a bank, Rossiya, believed to serve the Russian President and senior officials. The EU has also imposed its own asset freezes and visa bans.
Russia increased interest rates for a second month running Friday in an effort to limit the economic damage of rising tensions over Ukraine. This came hours after ratings agency Standard & Poor's cut Russia's credit rating to one notch above junk, citing a flight of capital from the country.
The Russian ruble lost more ground Friday, taking its losses against the dollar to 8.4% since the start of the year. Russia's benchmark Micex index also slipped by 0.7%, extending its decline so far this year to 14.5%.
Russian Prime Minister Dmitry Medvedev acknowledged this week that the sanctions, coupled with other factors, were affecting Russia's economy.
Any further sanctions could hurt the EU as well as Russia, since the two have deep trade ties and nearly a third of Europe's natural gas comes from Moscow.
Putin and German Chancellor Angela Merkel on Friday discussed the situation in Ukraine, Russia's state-run ITAR-Tass news agency reported.
The pair noted it was important to hold talks between Russia, the EU and Ukraine on the security of gas supplies as soon as possible, ITAR-Tass cited the Kremlin as saying.
CNN's Gul Tuysuz and journalist Victoria Butenko reported from Kiev, and CNN's Laura Smith-Spark wrote and reported in London. CNN's Elise Labott, Boriana Milanova, Diana Magnay, Antonia Mortensen, Ben Brumfield and Mark Thompson contributed to this report.
Posted by Greg Palmer