Russia will face additional economic sanctions if it continues to support the rebels in Ukraine, G7 leaders say.
In a statement Wednesday, the G7 economic force said Russia had undermined “Ukraine’s sovereignty, territorial integrity and independence.”
The warning comes after the EU added eight more Russians to its sanctions.
Earlier, Russia described the new US and EU sanctions as “destructive and short-sighted” and said they would lead to higher energy prices in Europe.
The G7 group includes the United States, Canada, France, Germany, Italy, Japan and the United Kingdom.
Its leaders said Russia could still “choose the path of de-escalation”, but warned President Vladimir Putin that it would face greater economic costs if it continued to support Ukrainian separatists.
They also called on all parties to establish a ceasefire at the site of the Malaysia Airlines plane crash, which was shot down on July 17 in eastern Ukraine.
Russia has come under increasing pressure to end its support for the rebels, who Western governments say are behind the downing of MH17, killing all 298 people on board.
Vladimir Putin has also been accused by the United States and the European Union of supplying heavy weapons to the rebels, a charge denied by his government.
On Tuesday, the United States announced new economic sanctions against Russia, expanding its scope to include three key sectors of the economy – energy, weapons and finance.
The EU is also extending its sanctions to the oil sector, defense equipment and sensitive technologies.
Details of the new EU sanctions are due to be released on Thursday.