European Union leaders will work to block loans for new projects in Russia by two multilateral lenders and broaden the scope of other sanctions in response to Moscow's actions in Ukraine.
According to a draft statement seen by Reuters, EU leaders, who are meeting in Brussels on July 16, will ask the European Investment Bank to suspend financing of new Russian public-sector projects.
It says EU countries will also work together to suspend funding for new projects in Russia through the European Bank for Reconstruction and Development.
The draft statement also says the bloc will broaden the scope of asset freezes to target companies and other organizations that undermine Ukraine's sovereignty.
The text of the draft could change, however, before its final adoption.
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U.S. and EU officials said on July 15 that Washington was considering imposing unilateral sanctions on Russia out of frustration with the EU's lack of tougher action against Moscow.
However, the White House said in a statement on July 15 that U.S. Vice President Joe Biden told Ukrainian President Petro Poroshenko that Washington "was engaging with European leaders to discuss the imposition of costs on Russia for its continued escalation of the conflict."
So far, the EU has imposed asset freezes on 72 people and two energy companies in Ukraine's Crimea region, which was annexed by Moscow earlier this year.
The White House also said Poroshenko told Biden that Ukraine tried to arrange an OSCE-facilitated meeting including the separatists, Russia, and Ukraine, but the separatists refused to attend.
In a separate statement, the White House said that President Barack Obama and German Chancellor Angela Merkel, in a phone call on July 15, also agreed "to ensure that Europe and the United States remain closely coordinated" on sanctions.
On July 15, at least 11 people were reportedly killed in eastern Ukraine when an apartment building was destroyed by explosions.
Kyiv officials have denied pro-Russian separatists' claims that a Ukrainian air strike caused the destruction on July 15 in the border town of Snizhne, in the Donetsk region.
Ukrainian Security and Defense Council spokesman Andrei Lysenko called the incident a "cynical and bloody provocation."
He said Ukrainian aircraft had not flown any sorties at the time of the explosions and suggested Russia had a role in the incident.
Ukraine's military said on July 15 that 258 of its soldiers had been killed, more than 900 injured, and 45 had been captured during its three-month-long military campaign in the east.
In the last two weeks, Ukrainian forces have cut in half the territory in eastern Ukraine that is held by the separatists, many of whom have fled to the regions' capitals of Luhansk and Donetsk.
