The US has called the movement of Russian troops into the Ukrainian region of Crimea an "act of aggression", hours after Vladimir Putin, Russia's president, said his country reserved the right to use all means to protect its interests.
John Kerry, the US Secretary of State, said on Tuesday that Russian military movements were against international law, and said that Russia was looking for an excuse to invade more parts of Ukraine.
Putin had earlier stated that any troop movements in Crimea were internationally legitimate because they had been requested by Viktor Yanukovich who, despite fleeing the country, was the "legitimate president".
"We reserve the right to use all available means. And we believe that this is fully legitimate. This is a last resort," he said.
Late on Tuesday, Russia announced that it had successfully test-fired a long-range missile, which hit its target in Kazakhstan. The US said it was notified of the test in advance.
After flying to Ukraine and meeting the country's new leaders, Kerry urged Russia to "de-escalate" the situation and "withdraw its troops", while warning that the US and the European Union would exert more political and economic pressure to force it to back down.
Kerry also praised the interim Ukraine government for showing restraint "despite an invasion of Ukrainian homeland".
The US government had promised to get Ukraine $1bn in loans to help lessen the effect of the possible removal of subsidies on energy sold to the Ukraine by Russia.
However, the US aid could come with strings attached, including demands for some austerity, Al Jazeera's Tim Friend, reporting from Kiev, said.
"Perhaps there lies the danger," he said.
"A lot of this turmoil and unrest in Ukraine is driven by the collapse in the economy. And if the ordinary men and women in the streets think they were going to face yet more austerity, then they risk further turmoil."
Meanwhile, Arseniy Yatsenyuk, Ukraine's interim prime minister, said his government had made first first "timid" contacts with Russian leaders aimed at resolving the crisis.
There was no immediate response from Russia to Yatsenyuk's comments and he himself stood firmly behind his government's decision to distance itself from Moscow's rule.
On the ground in Crimea, tension rose when Russian troops fired warning warning shots as unarmed Ukrainian soldiers approached a seized airbase at Belbek near Sevastopol.
But the standoff was over within minutes, when a Russian commander was told to hold off when it became clear neither side was willing to fight.
The Ukrainians ended up playing a football match, under the watch of Russian soldiers, and left afterwards.
The West is facing its biggest confrontation with Moscow since the Cold War. Ukraine has put its military on alert.
|Analyst: Putin lying about presence of Russian troops in Crimea
Speaking to Al Jazeera from Washington DC, John Squier of the National Endowment for Democracy told Al Jazeera: "I think that he [Putin] has painted himself into a corner. If he withdraws, he loses a lot of the credibility that he exercises in what now Russians refer to as 'near abroad' - countries of the former Soviet Union.
"But if he doesn't withdraw, I think that he is going to face the condemnation of Western countries and he is going to face sanctions of various sorts."
Kerry and other top diplomats have repeatedly warned Russia about the consequences of intervention.
Overnight on Monday, the US announced it was suspending military exercises and trade talks with Russia.
But Putin said that sanctions would affect other economies too.
"Those considering sanctions should think about the consequences ... in this tightly connected world we can of course harm each other but it will be mutual harm, and they need to think about that," he said.
Al Jazeera's Rory Challands, reporting from Moscow, said the latest tension could also affect the June meeting of the world's largest economies in Sochi.
"Becaude of international anger at Russia, there are now serious doubts about whether the summit will go ahead," he said.
Asked about the prospect of a cancellation of the meeting, Putin replied: "As far as the G8, we are preparing for the summit, we are ready to host our colleagues if they come, but they don’t have to."
He said that Russia was prepared to financially assist Ukraine but that late gas payments were preventing it from doing so. If Ukraine fails to pay for its February gas supplies, it will owe Russia $2bn.