Tension over Ukrainian crisis escalates, G7 imposes sanctions on Russia

KIEV -- Tension has escalated over the crisis in Ukraine where armed pro-Russian fighters are still holding a group of international observers and Ukrainian army officials as of Saturday, some of whom they accused of being NATO spies.

Media reports quoted unnamed German government sources as saying on Saturday that the Vienna-based Organization for Security and Cooperation in Europe has sent a negotiating team to try to secure the release of its observers.

A spokeswoman for the OSCE confirmed the news.

Ukrainian Prime Minister Arseny Yatseniuk, who is visiting Italy, will return to Kiev a day earlier than planned, because of the situation in the country, a spokeswoman for Yatseniuk also said on Saturday.

Pro-Russian fighters seized the OSCE observers together with Ukrainian army officials in a suburb of the eastern city of Slaviansk on Friday, a spokesperson said.

An accord signed in Geneva last week saw Ukraine, Russia, the United States and the EU agree on an OSCE mission to oversee the disarmament of militants and evacuation of occupied facilities.

The fighters claimed to have found a Ukrainian spy travelling with the group, which included four Germans, a Czech, a Dane and a Swede. The observers are being held in the national security building that has been seized by pro-Russian fighters in Slaviansk.

The Ukrainian government claimed that a Russian special forces operative was behind the seizure, while Moscow accused Kiev of failing to ensure the safety of the mission and said it was working to resolve the observer crisis.

Russia and the West are facing probably the worst standoff since the Cold War as the Ukrainian crisis worsens. Russia has deployed troops and helicopters to the borders with Ukraine, while NATO sent extra forces to eastern Europe.

Russian Foreign Minister Sergei Lavrov has accused the West of attempting to "capture" Ukraine for geopolitical projects, while U.S. State Secretary John Kerry criticized Russia for refusing to take "a single concrete step in the right direction" in the past seven days.

The standoff between Russia and Ukraine peaked on Thursday, when Russia began drills near the border with Ukraine in response to Kiev's "anti-terror" operation, which left five pro-Russian protesters dead.

The leaders of the Group of Seven industrialized nations agreed Friday night to impose more sanctions on Russia over its "inaction" in easing the tension in eastern Ukraine.

"We have now agreed that we will move swiftly to impose additional sanctions on Russia," said a joint statement issued by leaders of Britain, Canada, France, Germany, Italy, Japan and the United States, plus the presidents of the European Council and the European Commission.