Residents of Ukraine's Crimea region have begun voting in a contentious referendum on whether to split off and seek annexation by Russia.
As polling got under way, the US urged Russia to pull back its military forces and let Ukrainians undertake reforms that would address the rights of minorities and determine how political power is to be shared.
The White House stressed that Russia faces penalties that will hurt its economy and diminish its influence in the world if President Vladimir Putin does not back down in Crimea.
In a phone conversation with Russian Foreign Minister Sergey Lavrov , US Secretary od State John Kerry reiterated the United States would not recognise the results of the referendum taking place in Crimea.
White House senior adviser Dan Pfeiffer said the Obama administration's top priority is supporting the new Ukrainian government "in every way possible".
He said everything that Russia has done in Crimea has been a violation of international law and bad for stability in the region.
"President Putin has a choice about what he's going to do here. Is he going to continue to further isolate himself, further hurt his economy, further diminish Russian influence in the world, or is he going to do the right thing?" Mr Pfeiffer asked.
As Crimeans went to the polls, Ukraine's new prime minister insisted again that neither Ukraine nor the West will recognise the referendum, which it says is being conducted at gunpoint.
"Now, on the territory of the autonomous republic of Crimea under the stage direction of the Russian Federation, a circus performance is unde rway: the so-called referendum," Prime Minister Arseniy Yatsenyuk told a government meeting.
"Also taking part in the performance are 21,000 Russian troops, who with their guns are trying to prove the legality of the referendum."
The referendum comes two weeks after Russian-led forces seized control of Crimea. Locals say they fear the new Ukrainian government that took over when President Viktor Yanukovych fled to Russia last month will oppress them.
Russia raised the stakes yesterday when its forces, backed by helicopter gunships and armoured vehicles, took control of a Ukrainian village and a key natural gas distribution plant outside of Crimea - the first Russian military move into Ukraine beyond the peninsula of 2 million people. The Russian forces later returned the village but kept control of the gas plant, according to Ukraine's border guard agency.
If today's referendum passes a vote to split from Ukraine, Russia faces the prospect of quick sanctions from Western nations.
But so far Russian President Vladimir Putin has vigorously resisted calls to pull back in Crimea. At the United Nations yesterday Russia vetoed a Security Council resolution declaring the referendum illegal. China, its ally, abstained and 13 of the 15 other nations on the council voted in favour - a signal of Moscow's isolation on the issue.
German Chancellor Angela Merkel spoke to Mr Putin by phone today, proposing that an international observer mission in Ukraine be expanded quickly as tensions rise in the country's east. Her spokesman said she also condemned the Russian seizure of the gas plant.
In Sevastopol, Crimea's key port and the site of the Russian naval base, more than 70 people surged into a polling station within the first 15 minutes of voting.
Speakers blared the city anthem up and down the streets, giving Sevastopol a party feeling. But the military threat was not far away - a Russian naval warship still blocked the port's outlet to the Black Sea, trapping Ukrainian boats.
At a polling station inside a school in Sevastopol, Vladimir Lozovoy, a 75-year-old retired Soviet naval officer, was emotional as he talked about his vote.
"I want to cry. I have finally returned to my motherland. It is an incredible feeling. This is the thing I have been waiting for for 23 years," he said.
But Crimea's large Muslim Tatar minority - whose families had all been forcibly removed from their homeland and sent to Central Asia during Soviet times - remained defiant.
The Crimea referendum "is a clown show, a circus," Tatar activist Refat Chubarov said on Crimea's Tatar television station. "This is a tragedy, an illegitimate government with armed forces from another country."
The fate of Ukrainian soldiers trapped in their Crimean bases by pro-Russian forces was still uncertain. Crimea's pro-Russian authorities have said if those soldiers don't surrender after the vote, they will be considered "illegal".
"This is our land and we're not going anywhere from this land," Ukraine's acting defence minister, Igor Tenyuk, said.
In the regional capital of Simferopol, blue-and-yellow Ukrainian flags were nowhere to seen but red, white and blue Russian and Crimean flags fluttered in abundance in the streets.
Ethnic Ukrainians in Vladimir and Olga said they refused to take part in the referendum, calling it an illegal charade stage-managed by Moscow. Some said they were scared of the potential for widespread discrimination and harassment in the coming weeks, similar to what happened in nearby Georgia, another former Soviet republic, after a brief war with Russia in 2008.
"We're just not going to play these separatist games," said Yevgen Sukhodolsky, a 41-year-old prosecutor from Saki, a town outside Simferopol. "Putin is the fascist. The Russian government is fascist."
Vasyl Ovcharuk, a retired gas pipe layer who worked at Ukraine's Chernobyl nuclear disaster in 1986, predicted dark days ahead for Crimea.
"This will end up in military action, in which peaceful people will suffer. And that means everybody. Shells and bullets are blind," he said.