The US has announced it is increasing sanctions against Russia over Ukraine, targeting major banks, defense and energy companies.

Among those on the list are Gazprombank and Rosneft as well as senior officials in Russia and the self-declared rebel entities in eastern Ukraine.

The US has steadily escalated its sanctions against Russia over what it says is Moscow’s backing of the rebels – a claim denied by the Kremlin.

The EU also agreed to tighten its own sanctions against Russia.

The leaders of the 28-member bloc are currently holding talks in Brussels.

The new round of US sanctions announced by the US treasury department significantly expands previous penalties by Washington, which were limited to individuals in Russia and Ukraine and a number of companies.

President Barack Obama said the US sanctions were imposed because Russia had failed to fulfill it promises to de-escalate the crisis in Ukraine

This time they include the giant oil firm Rosneft and two major banks – Gazprombank and Vnesheconombank.

The weapons manufacturer Kalashnikov Concern is also on the list.

Two self-proclaimed rebel entities in eastern Ukraine – the Donetsk People’s Republic and the Luhansk People’s Republic – are also targeted.

Speaking in Washington, President Barack Obama said the sanctions were imposed because Russia had failed to fulfill it promises to de-escalate the crisis in Ukraine.

Barack Obama also stressed America’s support for Ukraine, saying that “Ukrainians deserve to forge their own destiny”.

The US penalties stop short of a complete disengagement with sectors of the Russian economy – a step that US officials said was being held in reserve in case Moscow launches a military invasion of Ukraine.

Russia denounced the US move. Deputy Foreign Minister Sergei Ryabkov said Russia would take measures “that will be felt quite painfully in Washington”, Interfax news agency reports.

In Ukraine itself, heavy fighting continued in the east.

Ukrainian officials said 11 soldiers died in the space of 24 hours. The number of casualties among pro-Russian separatists was not immediately known.

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