U.S. President Barack Obama in a telephone conversation with German Chancellor Angela Merkel urged Europe to be prepared for new sanctions against Russia because of the situation in Ukraine, the White House has said.

"The president underscored the need for the United States, European Union, and other global partners to be prepared to meet further Russian escalation with additional sanctions," the White House said in a statement.

Obama spoke with Merkel about the "concerning" situation in eastern Ukraine, where "pro-Russian separatists, apparently with support from Moscow, continue an orchestrated campaign of incitement and sabotage to undermine and destabilize the Ukrainian state." The leaders again called for Russia to move its troops back from the border region.

They commended "the Ukrainian government's efforts to move forward on constitutional reform, decentralization, and democratic elections and emphasized the importance of the international community's strong financial support for Ukraine."

The two leaders also discussed issues relating to the forthcoming meeting of the Ukrainian, Russian, and the U.S. foreign ministers and the EU High Representative.