The upper house of Russia's parliament fulfilled a request by President Vladimir Putin, who wants the ceasefire extended, to rescind the right to invade Ukraine in defence of its Russian speakers that it had granted him in March.
However, a leading lawmaker said the power could be quickly restored if required, and Western governments indicated they would judge Russia by the progress that was made in ending the fighting in eastern Ukraine.
During a meeting of Nato foreign ministers in Brussels, Secretary-General Anders Fogh Rasmussen said: "I regret to say we see no signs Russia is respecting its international commitments."
US Secretary of State John Kerry said Washington was working with its EU partners to prepare a new round of sanctions against Russia in case they are necessary.
Not all EU leaders back the idea but Foreign Secretary William Hague said if Russia did not "stop the flow of arms across the border (and) stop supporting illegally armed separatist groups", the case for tougher sanctions "will of course become stronger".