Barack Obama has said that the US is joining the EU in imposing new sanctions on Russia's energy sector, arms industry and financial institutions.

The US president said on Tuesday that the "major sanctions ... would ratchet up the pressure on Russia, including the cronies and companies supporting Russia's illegal activities in the Ukraine".

The sanctions included firms from the defence, banking, investment and energy sectors, he said.

"This is a choice that Russia, and President [Vladimir] Putin in particular, has made," he said, adding that Russia's financial sector was "already feeling the pain" of earlier sanctions.

Responding to questions, Obama said the sanctions did not represent a new Cold War.

The EU had earlier reached an agreement on its first broad economic sanctions on Russia, much in line with those announced by the US.

The EU's president, Herman Van Rompuy, said the sanctions were intended to be "a strong warning" but could be reversed if Moscow changed course in Ukraine.

The new sanctions were expected to be finalised on Wednesday, according to diplomats meeting in Belgium.

The Canadian prime minister, Stephen Harper, also announced on Tuesday that Canada was joining the US and the EU in implementing similar sanctions.

New casualties

EU ambassadors clinched their agreement as intense fighting between Ukrainian troops and pro-Russian rebels in eastern Ukraine killed dozens of civilians, soldiers and rebels.

The heavy fighting also prevented independent investigators from accessing the crash site of the downed jet, MH17.

Officials said 17 people, including five children, were killed in fighting on Monday night in the town of Horlivka, one of several places to experience battles between the rival forces in the past few days.

In the city of Luhansk, officials said five civilians were killed when bombs hit a retirement home.

"The enemy is throwing everything it has into the battle to complete encirclement of the DNR," Igor Strelkov, rebel commander, told the Reuters news agency in Donetsk on Monday night, referring to the self-proclaimed "Donetsk People's Republic".

"We were astonished by how much armour they threw into this battle," said Strelkov, a Russian national, sporting a camouflage T-shirt and trousers.

A rebel source in Donetsk said reinforcements including military equipment and fighters had crossed the nearby border with Russia into Ukraine.

Rebel leaders insist publicly that Russia is not supplying them. Russia also denies Western accusations that it is

supporting the rebellion with arms and troops.

The rebels say 7,400 Ukrainian soldiers have been killed or injured since Kiev launched what it calls its "anti-terrorist" operation against separatists in the east in early May. Ukraine puts the toll at fewer than 1,500.

A humanitarian corridor was due to open in Luhansk for six hours on Tuesday to allow residents to flee the fighting, but officials said they could not guarantee full safety. The UN says more than 100,000 people have already fled Ukraine's east.