Russia has antagonised its G8 partners with all seven agreeing to condemn its violation of Ukraine's sovereignty.
The joint statement came from the White House today as world leaders discussed Russia's mobilisation of forces in what was the biggest confrontation between Moscow and the West since the Cold War.
The Group of Eight comprised the US, Britain, Germany, France, Italy, Canada, Japan and Russia.
At the weekend, Russia President Vladimir Putin declared he had the right to invade his neighbour - a move supported by the Russian Parliament.
By this morning, Russia had complete operational control of the Crimean peninsula, a pro-Russian area of Ukraine. It was a bloodless seizure.
''This is not a threat, this is actually the declaration of war to my country,'' Ukraine Prime Minister Arseny Yatseniuk said.
Yatsenuik headed a pro-Western government that took power when the country's Russia-backed president, Viktor Yanukovich, was ousted last week.
President Barack Obama and the leaders of Britain, Germany and Poland today expressed ''grave concern'' and called the Crimean seizure a breach of international law and a threat to international peace and security.
Obama spoke with British Prime Minister David Cameron, German Chancellor Angela Merkel, and Polish President Bronislaw Komorowski in separate phone calls, the White House said.
''The leaders stressed that dialogue between Ukraine and Russia should start immediately, with international facilitation as appropriate,'' the White House said in a statement.
The four leaders emphasised their support for Ukraine and its efforts to hold elections in May, the White House said.
They promised to work together on a package of financial aid to help the country stabilise its tottering economy.
Russian military focus was now shifting to eastern swathes of Ukraine, where most ethnic Ukrainians spoke Russian as a native language.
Those areas saw demonstrations on Sunday after violent protests on Saturday, and for a second day pro-Moscow activists hoisted flags at government buildings and called for Russia to defend them.
RUSSIA, US TENSIONS
The Russian President Vladimir Putin has told US President Barack Obama he has the right to defend Russian interests and nationals, spurning Western pleas not to intervene in Ukraine.
US Secretary of State John Kerry today condemned Russia for what he called an ''incredible act of aggression'' and brandished the threat of economic sanctions. He was heading to the Ukrainian capital on Tuesday (local time).
''You don't just, in the 21st century, behave in 19th century fashion by invading another country on a completely trumped-up pretext,'' Kerry said.
He said Moscow still had a ''right set of choices'' to defuse the crisis. Otherwise, G8 countries and other nations were prepared to ''to go to the hilt to isolate Russia''.
''They are prepared to isolate Russia economically. The rouble is already going down. Russia has major economic challenges,'' he said. He mentioned visa bans, asset freezes and trade isolation as possible steps.
Analysts said US economic sanctions would likely have little impact on Russia unless they were accompanied by strong measures by major European nations, which have deeper trade ties with Moscow and are dependent on Russian gas.
A Kremlin spokesman declined to comment after Kerry's remarks.
Ukraine's envoy to the United Nations said Kiev would ask for international military support if Russia expanded its military action in his country. The UN Deputy Secretary-General Jan Eliasson was heading to Kiev tonight.
PREPARING FOR WAR
Russia has staged war games with 150,000 troops along the land border, but so far they have not crossed. Kiev said Russia had sent hundreds of its citizens across the border to stage the protests.
Ukraine's security council ordered the general staff to immediately put all armed forces on highest alert. However, Kiev's small and under-equipped military was seen as no match for Russia's superpower might.
The Ukraine Defence Ministry was ordered to stage a call-up of reserves; though Ukraine would struggle to find extra guns or uniforms for significant numbers of them.
PROTESTS CONTINUE IN UKRAINE CAPITAL
At Kiev's Independence Square, where anti-Yanukovich protesters had camped out for months, thousands demonstrated against Russian military action. Speakers delivered rousing orations and placards read: ''Putin, hands off Ukraine!''
''If there is a need to protect the nation, we will go and defend the nation,'' said Oleh, an advertising executive cooking over an open fire at the square where he has been camped for three months.
''If Putin wants to take Ukraine for himself, he will fail. We want to live freely and we will live freely.''
The new government announced it had fired the head of the navy and launched a treason case against him for surrendering Ukraine's naval headquarters to Russian forces in the Crimean port of Sevastopol, where Moscow has a major naval base.
RUSSIANS IN CRIMEA
In Crimea, Ukraine's tiny contingent made no attempt to oppose the Russians, who bore no insignia on their uniforms but drove vehicles with Russian plates and seized government buildings, airports and other locations in the past three days.
Kiev said its troops were encircled in at least three places. It pulled its coast guard vessels out of Crimean ports. Ukraine said its naval fleet's 10 ships were still in Sevastopol and remained loyal to Kiev.
Scores of Russian troops with no insignia were camped outside a base of Ukrainian troops at Perevalnoye, on a road from Crimea's capital Simferopol towards the coast.
A representative of the base commander said troops on both sides had reached agreement so no blood would be shed.
''We are ready to protect the grounds and our military equipment,'' Valery Boiko said.
''We hope for a compromise to be reached, a decision, and as the commander has said, there will be no war.''
Igor Mamchev, a Ukrainian navy colonel at another small base outside Simferopol, told Ukraine's Channel 5 TV that a truckload of Russian troops had arrived at his checkpoint and told his forces to lay down their arms.
''I replied that, as I am a member of the armed forces of Ukraine, under orders of the Ukrainian navy, there could be no discussion of disarmament. In case of any attempt to enter the military base, we will use all means, up to lethal force.''
A unit of Ukrainian marines was also holed up in a base in the Crimean port of Feodosia, where they refused to disarm.
Elsewhere on the occupied peninsula, the Russian troops assumed a lower profile on Sunday after the pro-Moscow Crimean leader said overnight that the situation was now ''normalised''.
Putin's justification citing the need to protect Russian citizens was the same as he used to launch a 2008 invasion of Georgia, where Russian forces seized two breakaway regions.
In Russia, state-controlled media portray Yanukovich's removal as a coup by dangerous extremists funded by the West and there has been little sign of dissent with that line.
PROTESTS IN THE EAST
Pro-Moscow demonstrators flew Russian flags on Saturday and Sunday at government buildings in cities including Kharkiv, Donetsk, Odessa and Dnipropetrovsk. In places they clashed with anti-Russian protesters and guards defending the buildings.
Ukrainian parliamentarian Hrygory Nemyriya, a spokesman to foreign journalists for the new authorities, said the pro-Moscow marchers were sent from Russia.
The worst violence took place in Kharkiv, where scores of people were hurt on Saturday when thousands of pro-Russian activists, some brandishing axe handles and chains, stormed the regional government and fought pitched battles with a smaller number of supporters of Ukraine's new authorities.
In Donetsk, Yanukovich's home city, the local government building was flying the Russian flag for the second day on Sunday. The local authorities have called for a referendum on the region's status, a move Kiev says is illegal.
A pro-Russian ''self-defence'' unit held a second day of protest, attracting about 1000 demonstrators carrying Russian flags.