SLOVYANSK, Ukraine (AP) -- Russia announced new military exercises Thursday involving ground and air forces near its border with Ukraine, swiftly responding to a Ukrainian operation to drive pro-Russia insurgents out of occupied buildings in the country's tumultuous east.
The Ukrainian move, which killed at least two people, brought new threats from Russian President Vladimir Putin, who denounced it as a "punitive operation."
"If the Kiev government is using the army against its own people, this is clearly a grave crime," Putin said.
Putin's statement and the announcement of new military maneuvers sharpened anxiety over the prospect of a Russian incursion into Ukraine. Russia's foreign minister warned a day earlier that any attack on Russian citizens or interests in eastern Ukraine would bring a strong response.
Secretary of State John Kerry quickly denounced the Russian actions, and in unusually blunt language warned that unless Moscow took immediate steps to de-escalate the situation, Washington would have no choice but to impose additional sanctions.
"Following today's threatening movement of Russian troops right up to Ukraine's border, let me be clear: If Russia continues in this direction, it will not just be a grave mistake, it will be an expensive mistake," Kerry said. "The window to change course is closing,"
Accusing Russia of fomenting unrest and separatist sentiment in eastern Ukraine following its annexation of the strategic Crimean Peninsula, Kerry added: "Nobody should doubt Russia's hand in this."
"What is happening in eastern Ukraine is a military operation that is well-planned and organized, and we assess that it is being carried out at the direction of Russia," the U.S. secretary of state said.
Animosity between Moscow and Kiev has been high since the ouster of Russia-friendly president Viktor Yanukovych in February in the wake of months of protests. Russia contends the government that took over consists of nationalists who aim to suppress the large Russian-speaking population in Ukraine's east.
In March, Russia annexed the Crimean Peninsula after its residents voted to split off from Ukraine. Russian troops backed up local militias that blocked off Ukrainian military bases in the run-up to the referendum.
Ukraine's acting president accused Russia of backing the separatists in the east and demanded that Moscow stop its intimidation campaign, and leave his country alone.
Oleksandr Turchynov said in an address to the nation Thursday that Russia was "coordinating and openly supporting terrorist killers" in eastern Ukraine, where government buildings in at least 10 cities have been seized by pro-Russia gunmen.
Turchynov said Russia must pull back its troops from the Ukrainian border and "stop the constant threats and blackmail."
His foreign minister, on a visit to Prague, also blasted the Russian decision to start new military maneuvers and said his country would fight any invading troops.
"We will now fight with Russian troops if ... they invade Ukraine. Ukrainian people and the Ukrainian army are ready to do this," Andriy Deshchytisa told The Associated Press.
Russia already has tens of thousands of troops stationed in regions along its border with Ukraine. The latest Russian military exercises involve ground troops in the south and the west and the air forces patrolling the border, Russian Defense Minister Sergei Shoigu said.
Ukraine and Russia reached a deal in Geneva last week to defuse the crisis, but pro-Russian insurgents in the east -- and nationalist militants in Kiev -- have defied calls for all sides to disarm and to vacate the buildings they are occupying.
NATO Deputy Secretary General Alexander Vershbow sharply criticized Russia for making "veiled threats" and said Russia should pull its troops back to their barracks.
The Ukrainian government and the West worry that Putin would welcome a pretext for a military intervention in eastern Ukraine. Putin denies that any Russian agents are operating there, but insists he has the right to intervene to protect the ethnic Russians who make up a sizeable minority in the east.
Earlier in Tokyo, President Barack Obama accused Moscow of failing to live up to "the spirit or the letter" of last week's deal to ease tensions in Ukraine. If that continues, Obama said, "there will be further consequences and we will ramp up further sanctions."
With no appetite in the U.S. for a military response, Obama is largely banking on Putin caving under a cascade of economic sanctions targeting his closest associates. But the success of that strategy also depends on European nations with closer financial ties to Moscow taking similar action, despite their concerns about a boomerang effect on their own economies.