US President Barack Obama has announced a series of fresh sanctions against Russia over its actions in Ukraine - prompting an immediate retaliation from Moscow.
In a speech on the White House lawn, Mr Obama said individuals linked to the Russian government would be targeted for increased sanctions.
A bank supporting those individuals will also be hit.
And the US is working with the European Union on a series of more stringent measures should the Kremlin continue in what Mr Obama described as an "illegitimate" incursion into the Crimean peninsula.
"We've been working closely with our European partners to develop more severe actions that could be taken if Russia continues to escalate the situation," said Mr Obama.
"I signed a new executive order today that gives us the authority to impose sanctions not just on individuals but on key sectors of the Russian economy."
Russian troops surround a Ukrainian base in Perevalnoe, Crimea Russia's Foreign Ministry has responded by announcing retaliatory sanctions which it says will "hit the United States like a boomerang".
Nine US officials and lawmakers have been banned from Russia.
Mr Obama has ruled out military action but his statement comes as EU leaders meet in Brussels to discuss an expansion of its own sanctions.
Further bank account freezes and travel bans on all those linked to the crisis is on the EU's agenda, and wider trade and financial restrictions are now under consideration.
The G8 - a group of leading industrial nations, including Russia - has been suspended until the crisis is resolved.
"The EU summit today and tomorrow will make clear that we are ready at any time to introduce phase-three measures if there is a worsening of the situation," German Chancellor Angela Merkel.
"As long as there is no political climate for an important format such as the G8, as is the case at the moment, the G8 no longer exists. Neither does the summit nor the format as such."
Europe's dependency on Russian gas will also be discussed by EU leaders.
Arriving at the summit, Prime Minister David Cameron revealed Ukraine would be offered closer links with the EU.
The Russian coat of arms is put up at a Ukrainian navy base He said: "One of the things we must do at this council is sign a new agreement with Ukraine offering them a prosperous future, access to our markets and real political support."
Despite the increasing threat of economic sanctions, the Kremlin has cranked up its attempt to absorb Crimea into Russia.
Troops have seized military bases on the peninsula and on Thursday Russia's deputy defence minister Yuri Borisov said their military presence in Crimea would be bolstered to protect against "all possible encroachments" and to make it "a worthy representative of the Russian Federation".
This came as Russia's lower house of parliament overwhelmingly approved a treaty to annex Crimea from Ukraine.
There is now just one legal obstacle before Crimea is absorbed by Moscow - ratification from Russia's upper house. Little opposition is expected there.
Ukrainian troops in Crimea are currently being redeployed to the mainland by the Kiev government.
Ukrainian navy commander Serhiy Haiduk and several other hostages were detained by Crimean authorities on Wednesday but have now been released.
Meanwhile, United Nations Secretary-General Ban Ki-moon travelled to Russia to meet Mr Putin on Thursday.
As talks started, Mr Ban said he was "deeply concerned" at the current situation.
The UN chief will fly to Kiev for talks with Ukraine's acting president and prime minister on Friday.
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