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Russia urged to engage in talks
David Cameron talking on the telephone to US President Barack Obama about the crisis in Ukraine (Prime Minister's Office/PA)
European Union leaders have urged Russian president Vladimir Putin to enter direct talks with the Ukrainian government warning of "far-reaching consequences" for relations with Moscow if there is any further escalation of the crisis in Crimea.
At emergency talks in Brussels, leaders of the group of 28 states agreed on a limited package of sanctions to take immediate effect with the threat of further measures - including asset freezes and travel bans - unless there was swift action to end the stand-off.
Earlier, in Washington, the White House announced that the United States was imposing visa restrictions targeting "a number of officials and individuals" as well as threatening further economic measures of its own.
Prime Minister David Cameron said that it was essential that Europe stood up to Russian aggression in Crimea which he described as a "flagrant breach of international law".
"Illegal actions committed by Russia cannot pass without a response. It cannot be business as usual with Russia," he said.
"We know from our history that turning a blind eye when nations are trampled over and their independence trashed, that stores up up far greater problems for the long run.
"So we must stand up to aggression, we must uphold international law, and we should support people who want a free European future."
The mood of the assembled leaders in Brussels appeared to have hardened after the parliament in Crimea voted in favour of joining Russia, with a referendum to be staged on the predominantly Russian-speaking peninsula on March 16.
Eastern member states led by Polish prime minister Donald Tusk had arrived demanding tougher action against Moscow, while German chancellor Angela Merkel, whose country is heavily reliant on Russian gas, called for a more cautious approach.
In the end, the summit agreed a three-phase approach beginning with the suspension of negotiations on a more liberal visa regime for Russian visitors and the halting of preparations for the G8 summit in Sochi.
The second phase would be the imposition of asset freezes and travel bans unless there are early talks with Ukraine, with the final phase a move to sanctions in a "broad range of economic areas" if there is any further escalation.
While there is no deadline for talks to start, Mr Cameron said that Russia - which refuses to recognise the interim government in Kiev - needed to move quickly.
"If the talks don't get under way and the talks don't make rapid progress, then we move to the second stage which is asset freezes and travel bans and that again could happen relatively quickly if progress isn't made," he said.
He acknowledged that Britain - as well as other EU countries such as Germany which is heavily reliant on Russian gas suppliers - would also suffer if they moved to phase three with full economic sanctions.
"Of course, there are consequences for Britain if you look at financial services, there are consequences for France if you look at defence, there are consequences for some European countries if you look at energy," he said.
But in order to stand up to aggression, he said that "you have to consider all and every one of those areas".
The EU has already agreed asset freezes on 18 individuals, including former president Viktor Yanukovych, and Mr Cameron promised help to the Kiev authorities to "go after ill-gotten funds and return them to the Ukrainian people".
He said a team from the National Crime Agency, supported by the Metropolitan Police and Crown Prosecution Service, had been deployed to Kiev to help the local authorities tackle corruption.
Interpol said that it was considering a request from the Ukrainian authorities to issue a Red Notice international wanted persons alert for the arrest of Mr Yanukovych on charges "including abuse of power and murder".
Earlier, Ukraine's interim prime minister Arseniy Yatsenyuk, in Brussels for talks with EU and Nato, denounced the breakaway vote by the Crimean parliament as "illegitimate" and vowed to defend the territorial integrity of the country.
"This so-called referendum has no legitimate grounds at all. Crimea was, is and will be an integral part of Ukraine," he told reporters after the discussions with the EU.
"We still believe that we can solve it in a peaceful manner but in case of further escalation and military intervention into the Ukrainian territory by the foreign forces, the Ukrainian government and Ukrainian military will act in accordance with the constitution and laws.
"We are ready to protect our country. We have less arms, no nuclear bombs, but we have the spirit. This is the spirit of Ukrainian revolution and this is the spirit of freedom and liberty."
Later, however, after a meeting at Nato headquarters, he emphasised that Kiev was seeking a purely peaceful resolution to the crisis.
"We are committed to resolve this crisis only peacefully and it is clear no military option is on the table. But it is clear that it is up to the Russian government to make the step back," he said.