Barack Obama and visiting German Chancellor Angela Merkel made a joint declaration after holding talks at the White House during which the US President said America US and Germany want to see a diplomatic resolution to the situation in Ukraine.
Obama reiterated the view that Ukrainians should be able to make their own decision and Moscow cannot impose its decision on the barrel of the gun.
"We are united in our determination to impose costs on Russia for its actions, including through coordinated sanctions. We're united on our unwavering Article 5 commitment to the security of our NATO allies, including German aircraft joining NATO patrols over the Baltics," Obama said.
"We're united in our support for Ukraine, including the very important IMF programme approved this week to help Ukraine stabilise and reform its economy.
"If in fact, we see the disruptions and the destabilisation continuing so severely that it impedes elections on May 25, we will not have a choice but to move forward with additional... severe sanctions," he said.
Addressing a joint press conference with Merkel, Obama said that as Ukrainian forces move to restore order in eastern Ukraine, it is obvious to the world that these Russian-backed groups are not peaceful protesters.
"They are heavily armed militants who are receiving significant support from Russia. The Ukrainian government has the right and responsibility to uphold law and order within its territory, and Russia needs to use its influence over these paramilitary groups so they disarm and stop provoking violence.
"We are united in our outrage over the appalling treatment of the OSCE (Organisation for Security and Cooperation in Europe) observers who've been detained in eastern Ukraine. Pro-Russian militants are still holding seven observers, including four Germans, as well as their Ukrainian escorts," Obama said.
Emerging out of the Oval Office along with Merkel after their talks, Obama told reporters at the Rose garden that the US and Germany want to see a diplomatic resolution to the situation in Ukraine.
"We have also been clear that if the Russian leadership does not change course, it will face increasing costs as well as growing isolation, diplomatic and economic. Already the ruble has fallen to near all-time lows. Russian stocks this year have dropped sharply, and Russia's slipped into recession," he said.
"Investors are fleeing, and it's estimated that a hundred billion dollars in investment will exit Russia this year. Russian companies are finding it hard to access the capital they need, and Russia's credit rating has been downgraded to just above junk status. In short, Russia's actions in Ukraine are making an already weak Russian economy even weaker," he said.
At the same time, Obama said if Russia continues on its current course, they would have a range of tools at their disposal, including sanctions that would target certain sectors of the Russian economy.
"We have been consulting closely with our European and G-7 partners, and we're stepping up our planning," he said.
"The Russian leadership must know that if it continues to destabilise eastern Ukraine and disrupt this month's presidential election, we will move quickly on additional steps, including further sanctions that will impose greater costs," he said, adding that that is a choice facing the Russian leadership.
Merkel said the priority is on the current issue of Ukraine, and that loomed very large on her meeting with Obama.
"It showed how important the trans-Atlantic partnership is also in today's times. I think it's a very good thing that all of the steps that we've taken so far, we've taken together, and today in our talk we yet again underlined that we fully intend to go ahead, as we did in the past," she said.
"What happened on Ukraine, what happened on the Crimean Peninsula... the postwar order has been put into question that rests on the acceptance of territorial integrity by all. And this is why it was so important for us to react in concord," Merkel said.
"What is at stake here is that people in Ukraine can act on the basis of self-determination and can determine themselves which road they wish to embark on into the future," she said, adding that further actions would be coming if situation does not stabilise in Ukraine after May 25.
"We have made a diplomatic offer, an effort for a diplomatic solution, so it's very much up to the Russians which road we will embark on, but we are firmly resolved to continue to travel down that road," Merkel said.