The United States said yesterday that Russia was firing artillery across the border into Ukraine to target Ukrainian military positions in the conflict against pro-Russian separatists.

“We have new evidence that the Russians intend to deliver heavier and more powerful multiple rocket launchers to the separatist forces in Ukraine, and have evidence that Russia is firing artillery from within Russia to attack Ukrainian military positions,” State Department spokeswoman Marie Harf said.

Harf, speaking at a regular media briefing, cited intelligence reports, but said she could give no more information of what the reports were based on.

Ambassadors are to further expand the scope of sanctions

Russia has in the past denied it is directly involved with the rebellion in its western neighbour, but the US and its European allies accuse Moscow of arming and encouraging the uprising and have imposed sanctions on Moscow in response.

Ukraine’s Security Council said on Wednesday preliminary information indicated missiles that brought down two government fighter jets over eastern Ukraine were fired from Russia.

Russia’s Defence Ministry yesterday dismissed this, saying it was “an attempt to mislead the public,” Interfax news agency reported, citing a Defense Ministry official.

Meanwhile the European Union would target state-owned Russian banks vital to financing Moscow’s faltering economy in the most serious sanctions so far over the Ukraine crisis under proposals considered by EU governments yesterday.

Ambassadors of the 28-nation bloc discussed options to curb Russian access to capital markets, arms and energy technology in response to the downing of a Malaysian airliner in an area of eastern Ukraine held by Russian-backed separatists on July 17.

Talks on the options for stepped-up action drafted by the European Commission will continue today, an EU official said, and diplomats said decisions on wider sanctions were likely at the earliest next week.

However, the ambassadors did agree to add more people and entities to the EU’s asset freeze list, using expanded criteria including Russian companies that help to undermine Ukraine’s sovereignty.

The names will not be published until later today but diplomats said it concerned 15 individuals and 18 entities, half of which were companies. Ambassadors also agreed to further expand the scope of sanctions to include companies and people who support Russian decision makers responsible for the annexation of Ukraine’s Crimea region or for destabilising eastern Ukraine.

Under one key proposal, European investors would be banned from buying new debt or shares of banks owned 50 per cent or more by the state.

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