The West is expected to further ramp up pressure on Russia, after leaders of the G7 united to exclude Moscow from planned G8 talks.
The Cold War-style showdown dominated international talks in The Hague for a second day, as Western leaders seek to isolate Russia over its actions in Ukraine.
During a meeting with Chinese President Xi Jinping and UN Secretary-General Ban Ki-moon, British Prime Minister David Cameron warned that Russia faced further diplomatic and political isolation if it intervened in eastern Ukraine.
Speaking on the sidelines of an international nuclear security summit, Mr Cameron said: "What I think we need to do is just send the clearest possible message about the eastern Ukraine and the steps that we don't want to see (Russian President Vladimir) Putin take.
"We need to send a very clear message that would lead to significant sanctions."
Mr Cameron said the international community must respond with "vigour"His comments came a day after the G7 - the US, UK, France, Germany, Canada, Italy and Japan - agreed to pull out of a scheduled G8 meeting in Russia and hold its own meeting in Brussels.
The move effectively suspended two decades of cooperation with Moscow in the G8 "until Russia changes course".
In a joint statement, the G7 leaders said: "This group came together because of shared beliefs and shared responsibilities. Russia's actions in recent weeks are not consistent with them."
British Foreign Secretary William Hague described the move as a "huge blow" for the G8.
He also indicated that the West was considering tougher sanctions against Russia.
The US and European Union have already targeted some Russian individuals, but are yet to impose broader economic sanctions.
Western leaders are working to put forward a united front on the crisisMr Hague acknowledged that measures targeting Russia's economy could carry a negative impact in Europe, but said "we have to be prepared to do that."
"Every country would have to do what is necessary if more far-reaching sanctions were applied, accepting that that would affect different economies in different ways," he said.
"The United Kingdom is fully prepared to play its full part."
Russian representatives, also in the Hague, largely shrugged off the G7's comments.
Russia's Foreign Minister, Sergei Lavrov, said the G8 had been useful to discuss issues such as the nuclear tensions with Iran and the civil war in Syria, but that it was not a vital tool.
Sergei Lavrov meets with Ukraine's Andriy Deshchystsya. Pic: @mfa_russiaMr Lavrov said: "If our Western partners believe the format has exhausted itself, we don't cling to this format.
"We don't believe it will be a big problem if it doesn't convene."
Mr Lavrov held his own meeting with his Ukrainian counterpart Andriy Deshchytsia on the sidelines of the nuclear talks.
It was the first time the pair had met since Ukrainian President and Kremlin ally Viktor Yanukovych was ousted last month following mass protests in Kiev.
Speaking ahead of the talks, Mr Deshchytsia warned that Ukraine would never give up Crimea.
He also warned Russia against making further attempts to seize Ukrainian territory, amid reports that Russian troops are assembling along its borders.
Ukrainian troops have been withdrawn from CrimeaMr Deshchytsia told reporters: "Our military and civilians living in Eastern Ukraine, Ukrainians, Russians, other nationalities, they are ready to defend their homeland."
Earlier in the day, Ukraine announced it was pulling all its forces from Crimea, after losing another military base to Russian troops in the early hours of the morning.
Russian forces have gradually seized control of the region, since voters in Crimea agreed to join the Russian Federation in a swiftly-arranged referendum following Mr Yanukovych's removal.
Since then, Nato's top commander in Europe, General Philip Breedlove, has warned that Russia's military force massing on Ukraine's border was "very, very sizeable and very, very ready".
He said he was worried the Russian military could make a move for Moldova's breakaway Transdniestria region.
Transdniestria, a narrow strip of land to Ukraine's southwest, already has a Russian military presence and most people there favour a union with the country.
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