Barack Obama has said the United States and Europe must join forces to impose sanctions on Russia to stop it destabilising Ukraine, where armed pro-Russian separatists are holding seven international observers prisoner.

Washington and Brussels are expected, possibly as early as today to name new people and firms close to Russian President Vladimir Putin who will be hit by punitive measures, but there is no consensus yet on wider economic sanctions.

Speaking during a visit to Malaysia, the US president said any decision on whether to slap sanctions on sectors of the Russian economy at a later time would depend on whether the United States and its allies could find a unified position on how to proceed. "We're going to be in a stronger position to deter Mr Putin when he sees that the world is unified and the United States and Europe is unified rather than this is just a US-Russian conflict," Mr Obama said.

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Yesterday William Hague insisted damage to the British economy from imposing trade sanctions on Russia would be a "price worth paying".

The Foreign Secretary said the EU, US and allies would be bringing forward further travel bans and asset freezes against Moscow over the coming days as punishment for its "bullying" behaviour.

But he warned that "more far reaching measures" were also being prepared that would have a fundamental impact.

The stand-off over Ukraine, an ex-Soviet republic of about 45 million people, has dragged relations between Russia and the West to their lowest level since the end of the Cold War. Mr Obama said Russia had not "lifted a finger" to get pro-Russian separatist rebels in Ukraine to comply with an international agreement to defuse the crisis.

"In fact, there's strong evidence that they've been encouraging the activities in eastern and southern Ukraine," he said.

Washington is more hawkish on further sanctions than Brussels, and this has caused a degree of impatience among some US officials with the European response.

Since Ukrainians demanding closer links with Europe toppled their pro-Russian president in February, Russia has annexed Ukraine's Crimean peninsula and massed tens of thousands of troops on the country's eastern border. Nato has responded by sending reinforcements to eastern Europe.

Separatists who control the eastern Ukrainian city of Slaviansk are holding seven European observers who were in the area under the auspices of the Vienna-based Organisation for Security and Cooperation in Europe (OSCE). An eighth 'prisoner', reportedly Swedish, has been freed on medical grounds after his captors said they released him as he had diabetes.

The observers, from Germany, Sweden, Denmark, Poland and the Czech Republic, are accused by their captors of spying for Nato and using the OSCE mission as a cover.

Vyacheslav Ponomaryov, de facto mayor of Slaviansk, said: "They were soldiers on our territory without our permission. Of course they are prisoners."

An OSCE delegation seeking the observers' release arrived for talks with Mr Ponomaryov yesterday.

Earlier, the leader of the detained observers said all the group were in good health, but they were anxious to be allowed to go home soon.

Mr Ponomaryov said his men had captured three officers with Ukraine's state security service who, he said, had been mounting an operation against separatists in the nearby town of Horlivka.

Meanwhile, pro-Russian separatists have also seized control of the offices of regional state television in the eastern Ukrainian city of Donetsk and said they would take it off air and broadcast a Kremlin-backed Russian channel instead.

Four separatists in masks, with truncheons and shields, were standing at the entrance to the building controlling access, while more separatists in camouflage fatigues could be seen inside.

About 15 police officers were standing a short distance away but were not trying to resist the separatists. It was the first time the station had been seized by the separatists