NATO will suspend "all practical civilian and military cooperation" with Russia because of Moscow's annexation of Ukraine's Crimea.
In a joint statement following a meeting about Ukraine in Brussels, NATO foreign ministers said that the alliance's political dialogue with Russia can continue as necessary. They said they do not recognize Russia's seizure of Ukraine's Crimean peninsula, calling it "illegal and illegitimate." They urged Moscow to take immediate steps to return to compliance with international law.
NATO and Ukraine have also agreed to intensify cooperation and promote defense reforms, according to a NATO statement released Tuesday.
The Associated Press quoted an unnamed NATO official who attended the meeting as saying that the foreign ministers agreed on a number of measures that may be taken, including the deployment and reinforcement of military assets in eastern NATO members such as Poland and the Baltic states, an increase of readiness levels for the NATO rapid response force, and a possible review of NATO crisis response plans, military training, and exercise schedules.
The foreign ministers also said they are committed to intensifying cooperation with Ukraine to strengthen its ability to provide for its own security.
The announcement came on the same day Russia warned Ukraine against aligning with NATO, saying Kyiv's previous attempts to move closer to the defense alliance had negative consequences.
"[Past attempts] led to a freezing of Russian-Ukrainian political contacts, a headache between NATO and Russia and...to a division in Ukrainian society," the Russian Foreign Ministry.
Sanctions draw Russia's ire
Russia has accused U.S. banking giant J. P. Morgan of illegally blocking a cash transfer from its embassy in Kazakhstan to a Russian company.
A ministry statement called J.P. Morgan's move "unacceptable, illegal and absurd" and warned the blockage will "have consequences" for the U.S. embassy in Russia.
The Russian Foreign Ministry linked the blockage to U.S. sanctions slapped on Moscow for its seizure of Ukraine's Crimea peninsula.
There was no immediate comment from U.S. officials or J. P. Morgan.
The U.S. Congress on Tuesday approved the sanctions announced by President Barack Obama last month and also gave final approval to $1 billion in loan guarantees to the Ukrainian government.
The White House said President Obama welcomes Congress' approval of the sanctions and the loan, saying the money will provide crucial support to Ukraine.
Also Tuesday, the Russian energy monopoly Gazprom, which supplies much of Ukraine's natural gas, announced a 40 percent increase in the price of gas sold to Ukraine.
European consumers receive about one-quarter of their gas from Gazprom, with most of those supplies delivered through Soviet-era pipelines running through Ukraine to the West.
Meanwhile, U.S. sanctions announced by President Barack Obama last month, were approved Tuesday by U.S. lawmakers, along with $1 billion in loan guarantees for the Kyiv government.
NATO's secretary-general said Tuesday that he'd seen no evidence that Russia is withdrawing its forces from the border with Ukraine.
"Unfortunately, I cannot confirm that Russia is withdrawing its troops,'' Anders Fogh Rasmussen told reporters ahead of the NATO meeting in Brussels.
So far, NATO has increased air patrols over the Baltics and the United States is planning more intense military exercises with Poland.
Diplomats say the ministers could decide to step up NATO military exercises or possibly set up permanent bases in Eastern Europe, closer to the Russian border.
Romania's president informed the lower house of parliament Tuesday that the United States is seeking permission to increase the number of troops and aircraft it has stationed at an airbase in the NATO ally.
Mihail Kogalniceanu air base on the Black Sea is a major hub for U.S. troops leaving Afghanistan and is located not far from Ukraine's Crimea peninsula, annexed last month by Russia.
Russia pulled back hundreds of troops from its border with Ukraine Monday, but tens of thousands still remain.
Call for early elections
Presidential candidate Yulia Tymoshenko is calling for early parliamentary elections in Ukraine.
Tymoshenko is a strong proponent of cutting Ukraine's dependence on Russia.
"I think that it's high time to take all steps to put an end to the whole system of Ukraine's dependence on the Russian Federation because the Russian Federation blatantly uses all our contacts in the energy sphere, in the economic, humanitarian and military spheres," she said at a Tuesday news conference. "That is why the end of Ukraine's dependence on Russia is a strategic aim of Ukraine."
Meanwhile, in Ukraine on Tuesday, the parliament voted to disarm illegal armed groups.
Police shut down the Kyiv base of a far-right nationalist group that played a key role in the ouster of Viktor Yanukovych after three people were injured in a shooting incident.
"The Ukrainian people demand order," said acting President Oleksandr Turchinov. "Those who have weapons can only belong to the armed forces of Ukraine, the national guard and the security service of Ukraine or other military groups.''
Some information for this report provided by Reuters.