A MONTH ago, Russian President Vladi­mir Putin appeared to be successfully executing his campaign to destabilize Ukraine. While Russian-backed insurgents consolidated a breakaway republic, weak and divided Western governments ignored their own deadlines for imposing sanctions. Now, suddenly, Mr. Putin faces twin reversals: relatively tough sanctions from the United States and European Union on Russian banks and oil companies, and a string of military defeats that have pushed back his proxy forces. It’s a dangerous moment for Mr. Putin — and, perhaps, an opportunity for Ukraine and its allies.

The Obama administration and European governments deserve credit for agreeing on joint action against Russia after months of haggling and hesi­ta­tion. But Mr. Putin is mostly responsible for his own setbacks. Having recklessly supplied his Ukrainian proxy force with advanced anti-aircraft missiles, he was surprised when one downed a Malaysian passenger jet, causing a heavy loss of European lives. Even then he might have avoided significant sanctions, but his response to the tragedy was to stonewall and deny responsibility even while escalating his weapons deliveries to the flailing insurgents.

President Obama, German Chancellor Angela Merkel and other European leaders have bent over backward to avoid a full rupture with Mr. Putin over Ukraine. Mr. Obama said Tuesday that the sanctions did not represent “a new cold war” but rather was “a very specific issue” related to Ukraine. Yet the combination of economic losses from the sanctions and Ukraine’s potential defeat of the rebels could pose a threat to Mr. Putin’s hold on the Kremlin. Having whipped up nationalist passions over Ukraine with his state-directed propaganda apparatus, the Russian ruler might have trouble explaining the rebels’ eclipse. While the effect of sanctions will take time to sink into the economy — the Russian stock market and ruble rose Wednesday — Mr. Putin has already been on thin ice with Russia’s middle class and its private-sector businessmen.

It’s not yet clear how Mr. Putin will react to these reversals. He is capable of surprising shifts of direction — such as his sudden offer last summer to help strip his ally Syria of chemical weapons. Ukrainian officials, like some of their counterparts in the West, worry about a reckless lashing out by a ruler who feels cornered. Mr. Putin, they counsel, still should be offered a face-saving way of retreating from Ukraine. President Petro Poroshenko and the interim government, which have been offering such compromises all along, are set to renew negotiations with the Russian-backed forces this week.

While such initiatives are worth trying, the reality is that Mr. Putin is more likely to escalate than back down. Ukraine and the West must be prepared for a more forceful and overt Russian military intervention. That should mean more support for the Ukrainian military, which is seeking drones and better communications equipment from the West, and more economic support for the new government, which has been forced to spend heavily on the armed forces. Russia should not be allowed to permanently entrench its proxy forces in eastern Ukraine, creating a “frozen conflict.”

The West also should not shrink from the destabilization of Mr. Putin’s regime. Once considered a partner, this Kremlin ruler has evolved into a dangerous rogue who threatens the stability and peace of Europe. If he can be undermined through sanctions and the restoration of order in eastern Ukraine, he should be.