Speaking at the White House, President Obama said:
"If Russia continues on its current path, the cost on Russia will
continue to grow"
US
President Barack Obama has announced new economic sanctions against
Russia, saying they will make Russia's "weak economy even weaker".
He said the co-ordinated actions of the US and European Union would "have an even bigger bite" on Russia's economy.The new restrictions include banning Americans or people in the US from banking with three Russian banks.
The aim is to increase the cost to Russia of its continued support for pro-Moscow rebels in eastern Ukraine.
Moscow denies charges by the EU and US that it is supplying heavy weapons to the rebels.
President Putin has urged the Russian defence sector to rely less on foreign components
"If Russia continues on this current path, the costs on Russia will continue to grow," Mr Obama said.
The US Treasury said the banks being targeting in this round of sanctions were VTB, the Bank of Moscow, and the Russian Agriculture Bank (Rosselkhozbank).
Earlier, the EU also adopted new economic sanctions against Russia, targeting the oil sector, defence equipment and sensitive technologies.
This latest wave of US sanctions comes as no great surprise.
For the past few weeks, the US been threatening further action against Russia. It's also been calling for the EU to impose stiffer penalties.
The administration said the tragic events surrounding MH17 should serve as a "wake-up call" to reticent EU countries that something had to be done to curb the actions of Russian-controlled separatists.
President Obama hopes these new measures will apply pressure on President Putin to change his course, something previous sanctions have failed to do so far.
When asked by a reporter if this was the start of a new cold war, Mr Obama said it wasn't. The US-Russia relationship is, in the words of one US official, "complicated".
As well as disagreements, there is co-operation - the two nations are working together on Iran nuclear disarmament, and reducing Syria's chemical weapon stockpile.
German Chancellor Angela Merkel, who had been reluctant to step up sanctions because of Germany's trade links with Russia, said the latest measures were "unavoidable".
Vladimir Chizhov, Russia's ambassador to the EU, told the BBC: ""I am disappointed because the EU is slipping along the tracks that lead nowhere.
"I can understand that they are concerned with the situation; so are we, but it's not a prerequisite to impose sanctions."
He added that he believed Ukraine should be subject to sanctions for its role in the conflict in the country's east.
Jonathan Beale on the outskirts of Donetsk says
there is sustained artillery fire towards one of the last strongholds of
pro-Russian separatists
An international team has again failed to access the crash site, amid heavy fighting between government forces and rebels there.
Western governments believe the pro-Russian separatists shot the plane down on 17 July with a Russian missile, believing it to be a Ukrainian military flight. The rebels and Moscow deny that, instead blaming the Ukrainian military.
Kerry plea to Russia Speaking in Washington, US Secretary of State John Kerry urged Russia and the rebels to give Western investigators full access to the crash site.
John Kerry: "President Putin can make a huge difference, if he chooses to"
"The site has to be cordoned off, the evidence has to be preserved, and Russia needs to use its considerable influence among the separatists in order to be able to help ensure this basic approach of common decency."
Ukrainian troops are continuing an offensive aimed at encircling the rebels in Donetsk region. In the latest developments:
- Several shells are said to have struck buildings in the separatist stronghold of Donetsk city
- Ukraine says its troops have entered the towns of Shakhtarsk and Torez in Donetsk region, and Lutuhyne in Luhansk region
- Ten Ukrainian soldiers and at least 22 civilians have reportedly been killed in the last 24 hours
- The dead civilians are said to include three children and five people at a home for the elderly
- A group of hackers sympathetic to the rebels says it has disabled the website of the Ukrainian president.
Europe's leaders did not want to move to economic sanctions but they were moved by two considerations: the outrage at the way investigators have been blocked from access to the crash site of the downed plane and, secondly, the fact that Russia, since the incident, has been allowing heavy weapons across the border into Ukraine.
The calculation in Europe is that it had to act for its own credibility and that it may have to go further to ensure that President Vladimir Putin and his inner circle understand that their actions carry consequences.
How will Russia respond? Hard to say, although Foreign Minister Sergei Lavrov said Russia would not retaliate or "fall into hysterics".
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