The United States and the European Union have announced fresh sanctions against Russia, after President Obama accused Vladimir Putin and Russian-backed separatists of interfering with the investigation into the shooting-down of Malaysian Airlines flight 17.
The US measures are targeting the energy, arms and finance sectors of the Russian economy.
The European Union, meanwhile, is barring the access of Russian state banks to the continent's capital markets.
Our Washington Correspondent Simon Marks reports.
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President Obama painted a deeply gloomy picture of the outlook for US-Russian relations.
He accused Vladimir Putin of "nice words" that are "not matched by actions".
Far from assisting with the investigation into the shooting down of the Malaysian Airlines jet, he accused Russian-backed separatists of tampering with evidence at the crash-site.
He said their Russian paymasters were launching artillery strikes into Ukraine from outside the country, and massing forces once again on its borders.
As a result, the President said, fresh sanctions were unavoidable.
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The White House is delighted that the latest US moves are matched by a series of measure embraced by European Union leaders.
The President cited a 5-way phone call he had earlier in the week with David Cameron, Francois Hollande, Angela Merkel and the leaders of Italy and the Netherlands.
For the first time in months, attitudes in Europe towards Russia appear to have hardened in light of the Malaysian Airlines disaster according to reporter Jack Parrock in Brussels.
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Back at the White House, President Obama was asked if this is a new Cold War?
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And the President said the damage already done to the Russian economy by sanctions will now be dwarfed by the impact of the new measures.
And he vowed more will follow unless Vladimir Putin heeds the call of the international community for diplomacy to resolve the crisis in Ukraine.
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