Ministers from the 28 alliance members are meeting in Brussels for the first time since Russia's military occupation and annexation of Ukraine's Crimea region triggered the worst East-West crisis since the Cold War.
They will discuss ways to boost Nato's military presence in former communist central and eastern Europe to reassure allies rattled by Russia's moves.
Secretary-General Anders Fogh Rasmussen said: "Unfortunately, I cannot confirm Russia is withdrawing its troops. This is not what we are seeing."
Diplomats said ministers would consider options ranging from stepped-up military exercises and sending more forces to eastern member states to the permanent basing of alliance forces in those countries - a step Moscow would view as provocative.
Asked if Nato could station forces permanently in the small former Soviet Baltic states, Mr Rasmussen said: "We are now considering all options to enhance our collective defence, including further development of our defence plans, enhanced exercises and also appropriate deployments."
Polish Foreign Minister Radoslaw Sikorski told reporters as he arrived he would welcome "some more prominent Nato presence in Poland".
Some Nato members are cautious about taking steps that could aggravate the crisis, particularly after Moscow said on Monday it had pulled some troops back from near the Ukrainian border.
But a Nato military official said Russia still had some 35,000-40,000 troops stationed near the border and there was no sign of any significant reduction in their numbers.
The Russian forces included mechanised infantry, armoured units, special forces, logistics units and "fairly substantial numbers" of planes and helicopters, the official said.
There was also little evidence the troops were there for training, the official added. There were some exercises but other units were moving to a location and staying put.
The official said Russian forces did not pose a threat to Nato countries but could pose a threat to Ukraine,
America and its allies have made clear they have no military plans to defend Ukraine, which is not a Nato member.
Since the Crimea crisis erupted, America has increased the number of its aircraft in regular Nato air patrols over the Baltic states and has beefed up a previously planned training exercise with the Polish air force.
Earlier yesterday, Russian natural gas producer Gazprom announced an above 40% increase in the price Ukraine must pay for gas, stepping up economic pressure on Kiev in its political standoff with Moscow.
The company's chief executive, Alexei Miller, said the increase was needed because Ukraine's debt for unpaid gas bills now stood at £1billion.
Russian President Vladimir Putin had agreed in December to cut the gas price for Ukraine and provide a financial lifeline to Kiev after its abrupt decision not to sign a trade agreement with the EU and rebuild economic ties with Moscow instead.