Secretary of State John Kerry delivered a stern warning to Russia Thursday evening, one week after a tentative agreement to defuse the crisis in Ukraine appeared to have no impact on the violent clashes between pro-Russian separatists and the Ukrainian government.
"The window to change course is closing," Kerry told reporters at the State Department. "President [Vladimir] Putin and Russia face a choice."
If Russia does not reverse course and take action to urge the separatists to stand down and give up their arms, Kerry said the U.S. and its allies are poised to take actions directed at hurting Russia's economy.
"The world will make sure that the costs for Russia will only grow. As President Obama reiterated earlier today: We are ready to act."
Ukraine's military launched an operation Thursday to try to force pro-Russian insurgents out of occupied buildings in several cities in the eastern part of the country. The move prompted new threats from Putin, and Russia's defense minister quickly announced new military exercises for troops gathered near Ukraine's border.
The escalated military actions sharpened anxiety in the region about the prospect of a Russian military invasion into eastern Ukraine. Russia's foreign minister warned a day earlier that any attack on Russian citizens or interests in eastern Ukraine would prompt a strong response.
In his Thursday remarks, Kerry laid out the strongest case to date that Russia's military and intelligence operations are directly involved in assisting and potentially directing the pro-Russian separatists' activities even as the Kremlin publicly expresses a desire to avoid further escalation in Ukraine.
Kerry accused Russia of "subterfuge and sabotage" through "gross external intimidation" and worse.
He said the pro-Russian separatist activity in Ukraine is a military operation that is "well-planned and organized" and one "we assess that is being carried out at the direction of Russia."
The U.S. intelligence community has gathered evidence that Russia's intelligence and special forces are playing an active role in destabilizing eastern Ukraine with "personnel, weapons, money and operational planning and coordinating," he said.
He repeatedly referred to the uniforms of the separatists as being new and their weapons and gear as matching those worn and used by Russian special forces.
"We have seen this movie before," he said. "We saw it most recently in Crimea, where similar subterfuge and sabotage by Russia was followed by a full invasion, by the way, for which President Putin recently decorated Russian special forces at the Kremlin.
"Nobody should doubt Russia's hand in this," he added, noting that some pro-Russian forces are even bragging about Moscow's involvement on social media sites.
Kerry then mocked Russia's claims that the U.S. and its European allies are exaggerating Moscow's involvement.
"Russia is actually mystified to see Ukraine's neighbors and like-minded free people all over the world united with Ukrainians who want to build a better life and choose their leaders for themselves, by themselves," he said.
Addressing Russian troop movements "right up to Ukraine's border," he said Russia will be making a "grave" and "expensive mistake."
Western sanctions against Russia are already taking a toll on the country's economy, he said, citing Russian Prime Minister Dmitri Medvedev's public comments underscoring the negative economic impact.
Already, he said, $70 billion in capital has fled the Russian financial system in the first quarter of 2014, more than all of last year. Growth estimates for 2014 have been revised downward by two to three percentage points, following a year in which the growth of Russia's gross domestic product was already the lowest since 2009, he said.
"Make no mistake that what I've just described is really just a snapshot, and is also, regrettably, a preview of how the free world will respond if Russia continues to escalate what they had promised to de-escalate," he said.
This story is based in part on wire reports.