Frank Steinmeier made the remarks on the eve of an EU summit which will consider further sanctions against the Russian government.
Russia has denied claims by NATO that its forces illegally crossed into Ukraine to support separatists there.
Some 2,600 people have died in fighting between rebels and Ukrainian troops.
The conflict erupted in April when Russia’s annexation of Crimea prompted rebels to take control of large parts of the eastern regions of Donetsk and Luhansk.
Russian President Vladimir Putin has blamed Ukraine for the crisis, comparing its siege of Donetsk and Luhansk to the siege of Leningrad by Nazi Germany in World War Two.
Russia could face new restrictions after a summit of the European Union’s 28 heads of state in Brussels on Saturday.
The EU and the US have already imposed sanctions against dozens of senior Russian officials, separatist commanders and Russian firms accused of undermining Ukrainian sovereignty.
In late July, the EU also blacklisted some key economic sectors, prompting Russia to retaliate by banning food imports.
Russia’s energy minister has warned that the Ukrainian crisis could lead to a disruption of gas supplies to European countries this winter.
Earlier on Friday, NATO held an emergency meeting after releasing satellite images it said showed columns of Russian armed forces inside Ukrainian territory.
NATO Secretary-General Anders Fogh Rasmussen called on Russia to “take immediate and verifiable steps towards de-escalation”.
Anders Fogh Rasmussen also indicated NATO could consider Ukraine’s application to join the alliance, shortly after PM Arseny Yatsenyuk announced he was putting Ukraine on course for NATO membership.
Meanwhile, heavy fighting has continued near the strategic port of Mariupol on the Azov Sea. Rebel forces are trying to capture the city but Ukrainian government troops are digging in.
On August 28, the separatists seized the nearby town of Novoazovsk.
The separatists’ advance toward Mariupol has raised fears that the Kremlin might seek to create a land corridor between Russia and Crimea.
Rebels are also reported to have surrounded government soldiers in several places further north, near Donetsk city.
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