NATO allies are boosting their military spending in Europe and are preparing to impose greater sanctions against Russia unless it withdraws its forces from the Ukrainian border and stops the flow of weapons to separatists.

Anders Fogh Rasmussen, NATO secretary-general, said after a Brussels summit on Wednesday there would be "no business as usual with Russia" until it came back "in line with its international obligations".

He urged Russia to "take genuine and effective measures to stop destabilising Ukraine ... create conditions for the peace plan to be implemented ... end its support for armed separatist groups, and ... stop the flow of weapons and fighters across its borders".

The measures include the establishment of new trust funds to support defence-capacity building in critical areas such as logistics, command and control, and cyber-defence, and to help retired military personnel to adapt to civilian life, Rasmussen said.

John Kerry, US secretary of state, announced after the meeting that US President Barack Obama would ask the US Congress for another $1bn in defence spending for Europe.

Other NATO allies have so far not announced to what extent they will increase their military budgets.

Kerry's 'wake-up call'

Kerry urged Russia to stop destabilising Ukraine and described its recent moves there as a "wake-up call".

"After a free and fair election the Ukrainian people celebrated a peaceful transfer of power. [NATO] commends the Ukrainian government for reaching out to separatists and the Russian government and now it is critical for President [Vladimir] Putin to stop the flow of weapons over the border," Kerry said.

"Until Russia makes that commitment the US and Europe are compelled to prepare greater sanctions."

Philip Hammond, UK defence secretary, told Al Jazeera that Russia did not accept the international norms of behaviour and had shown it was prepared to intervene in the region where it felt it was in its own national interests.

"We in Europe in particular have to wake up to the fact that we have on our borders a powerful neighbour that does not accept the rules by which we live," Hammond said.

The upper house of the Russian parliament on Wednesday cancelled a resolution allowing the use of military force in Ukraine, at the demand of Putin.

Pavlo Klimkin, Ukraine's foreign minister, praised the Russian parliament's vote as a "positive step", but urged Russia to also go further to stem the flow of fighters and weapons across the border.

Klimkin added that Ukraine was doing its "utmost" to de-escalate the situation in the country's eastern regions of Donetsk and Luhansk.

Earlier on Wednesday, Ukraine's president sought urgent talks with his Russian counterpart after rebels shot down an army helicopter despite a ceasefire.

Petro Poroshenko said he hoped German Chancellor Angela Merkel and Francois Hollande, the French president, would join him on a conference call to Putin on Wednesday.

On Tuesday, the deaths of nine servicemen in the helicopter near Slovyansk, and loss of two other soldiers in attacks by separatist gunmen, prompted Poroshenko to threaten to begin a powerful new military campaign in the industrial east.

Russia said on Wednesday it hoped Kiev and the international community would take heed of the "positive signals" it was sending over the Ukraine crisis.

"We are counting on the positive signals that the Russian president is now sending being heard across the world and, above all, in Ukraine," Grigory Karasin, Russia's deputy foreign minister, told Russian news agencies.

The AFP news agency on Wednesday reported new shelling in Slovyansk by Ukrainian forces, who have effectively surrounded the city of nearly 120,000.

Their push was met with extended rounds of anti-aircraft and heavy machine-gun fire, the agency reported.