U.S. Urges Putin to Stop 'Destabilizing' Ukraine as Moscow Calls for Federalization

The United States called Monday on Russia's President Vladimir Putin to stop “destabilizing” Ukraine, saying it was concerned about "several escalatory" moves over the weekend, as Moscow called for the federalization of the unrest-hit country.

White House spokesman Jay Carney said the United States was prepared to impose further sanctions, this time targeting the Russian economy, if the situation continues to escalate.

The warning came after pro-Kremlin militants occupied the seat of government in Donetsk in eastern Ukraine and proclaimed independence from Kiev, promising a referendum on joining Russia.

"We are concerned about several escalatory moves in Ukraine at the weekend. We see them as the result of increasing Russian pressure on Ukraine," Carney said.

He warned that any move into eastern Ukraine by Russian forces would be regarded as "a serious escalation and would unleash new consequences from the West."

"We call on President Putin and his government to cease efforts to destabilize Ukraine," he said.

The United States imposed targeted sanctions on a Russian bank and officials in Putin's inner circle after Moscow last month annexed Crimea, a breakaway mainly Russian-speaking province of Ukraine.

The White House has previously said that further aggression from Moscow could lead the United States to seek sanctions that go beyond individuals and aim to hurt the broader Russian economy.

Later on Monday, Moscow called for the federalization of Ukraine, saying authorities in Kiev needed to heed the "legitimate demands" of people in the Russian-speaking eastern regions of Ukraine, where there have been calls for independence from the central authorities.

Ukraine could not have long-term stability "without conducting genuine constitutional reform" whereby "the interests of all the country's regions ... would be ensured through federalization," said the Russian foreign ministry in a statement.

"Stop pointing the finger at Russia, blaming it for all the problems in today's Ukraine."

"The Ukrainian people want a clear answer from Kiev to all of their questions. It's time to heed these legitimate demands."

The Kremlin has been lobbying for Ukraine to become a federation to ensure greater autonomy for its Russian-speaking eastern regions.

Ukrainian Prime Minister Arseniy Yatsenyuk, however, said Monday federalization was a dangerous idea aimed at splitting Ukraine.

Moscow said it was watching carefully the latest events in the largely Russian-speaking east of Ukraine.

The call came after Russia annexed the Russian-speaking peninsula of Crimea in February after staging a referendum Western powers condemned as illegitimate.

Later on Monday, the U.S. State Department said it wants to see talks between Washington, Russia, Ukraine and the European Union to seek a way to calm the political crisis in Ukraine.

State Department spokeswoman Jen Psaki said Secretary of State John Kerry had discussed holding such four-way talks in a call with his Russian opposite number Sergei Lavrov.

But she also echoed the earlier warning that Washington sees the hand of Moscow behind some of the unrest in eastern Ukraine.

"He conveyed to Foreign Minister Lavrov that the United States is watching events over the last 24 hours in Kharkiv, Donetsk, Lugansk and Mariupol with great concern and noted that these do not appear to be a spontaneous set of events," Psaki said.

"Rather, the secretary noted the Ukrainian government's assertion that this appeared to be a carefully orchestrated campaign with Russian support.

"He made clear that any further Russian efforts to destabilize Ukraine will incur further costs for Russia and the ministers also discussed convening direct talks within the next 10 days between Ukraine, Russia, the United Stades and the EU to try to de-escalate the tensions.

"Discussions about the right timing and agenda for that meeting will of course continue."

Earlier, the White House had warned that Russia could face broader economic sanctions if it continues to interfere in eastern Ukraine, having already annexed the breakaway Crimean Peninsula.