The German chancellor, Angela Merkel, said on Friday that she told Vladimir Putin that Russia had not done enough to implement the Geneva accord and EU foreign ministers would meet as soon as possible to contemplate further sanctions against Russia.

At a news conference in Berlin with Poland's prime minister, Donald Tusk, Merkel said Russia had the means to convince the pro-Russian separatists in Ukraine to take a peaceful route but showed no sign of doing so.

"I spoke to the Russian president this morning and made clear again that on the one hand Ukraine has taken a whole series of steps to implement the Geneva accord but on the other side I see no Russian backing for the accord which would of course have an effect on the separatists in Ukraine," she said.

"We will therefore have to react. This will be a joint European action and an action by the G7 ... because of the lack of progress we will have to contemplate further sanctions within the second stage of sanctions."

Merkel spoke after Barack Obama told reporters in Seoul he would call European leaders during the course of the day to discuss action following the failure of the Geneva agreement, a possible prelude to new sanctions.

Russia is making an expensive mistake over Ukraine, says John Kerry Reuters

In unusually blunt language, the US secretary of state, John Kerry, said on Thursday that Washington would have no choice but to impose additional sanctions unless Moscow took immediate steps to de-escalate the situation in Ukraine. He said it would be a grave and "expensive mistake".

The crisis is already showing signs of seriously damaging the Russian economy. The Standard & Poor's credit agency cut the country's credit rating on Friday for the first time in more than five years, following concerns about capital flight and risks to investments.

The Russian foreign minister, Sergei Lavrov, appears to have offered a deal to resolve the crisis in eastern Ukraine on Friday when he suggested that if the country's government cleared out the nationalist protest camp in Kiev, then pro-Moscow separatists would lay down their arms.

Western officials greeted the proposal with scepticism, noting that such confidence-building measures were at the heart of the international agreement reached last week, but which failed to end the separatists' occupation of public buildings in eastern Ukraine.

They said the protest camp in Independence Square in Kiev, erected in February during the uprising that toppled the Russian-backed president, Viktor Yanukovych, was already being dismantled.

The Organisation for Security and Co-operation in Europe, which is monitoring the situation in Ukraine, reported that its team in the capital "observed the ongoing clearing of barricades in the Maidan square".

"The situation in the capital city was calm," the report added.

One western official raised the possibility that Lavrov might be seeking to use the dismantling of the camp as a face-saving way out of the crisis, but cautioned that there were few other signs of compromise from Moscow.

Moscow and western capitals are involved in an increasingly bitter war of words over who is to blame for the crisis, which is becoming steadily more violent. The Ukrainian government launched further military operations against pro-Russian separatists on Friday, having killed up to five rebels on Thursday.

The Ukrainian prime minister, Arseniy Yatsenyuk, made the strongest comments yet on Friday when he accused Russia of trying "to start world war three" and acting like a gangster.

The US says Russia is fomenting unrest and separatist sentiment in eastern Ukraine following its annexation of the strategic Crimean peninsula. Russia accuses the US of encouraging a pro-western government in Kiev to adopt anti-Russian policies.

In its most explicit comments yet on the apparent collapse of last week's agreement, the US on Thursday directly accused Russia of reneging on the Ukrainian peace deal.

"Since Geneva, Russia has failed not only to provide public support for the de-escalation of tensions but has actively stoked tensions in eastern Ukraine by engaging in inflammatory rhetoric," the state department spokeswoman, Jen Psaki, told reporters.

"The secretary of state has spoken with foreign minister Lavrov six times since Geneva and he has never once taken responsibility for the implementation of Russia's Geneva commitments and he has gone so far as to say the Geneva agreement demands no action from Russia."

Officials in Washington also angrily rejected Moscow's characterisation of clashes with Ukrainian soldiers that raised tensions between the two cold war foes to dangerously high levels.