Faced with few options to counter Russia's military incursion in Ukraine's Crimean peninsula, European Union foreign ministers have sought a joint response possibly threatening economic sanctions but leaving dialogue as the most viable way forward.

Polish foreign minister Radoslaw Sikorski said the EU faced "the most serious crisis" since the Balkan wars two decades ago.

The ministers today held an emergency meeting to assess the weekend escalation in the Crimea and said any EU-Russia confrontation would hurt both sides.

Irish foreign minister Eamon Gilmore said sanctions against Russia are an option that will be discussed.

But several other ministers said the immediate focus should be on diplomacy and forging a direct dialogue between Russia and the new leadership in Ukraine to de-escalate the situation.

Spain's foreign minister Jose Manuel Garcia-Margallo said discussions are also under way on convening an emergency summit of EU heads of state and government on Thursday.

The 28-nation EU and Russia have long been uneasy partners on a continent in transition where much of central Europe has been tilting westward over the past years.

When Ukraine was on the point of doing likewise last November, its then-president Viktor Yanukovych suddenly switched toward Moscow, setting off the crisis in Kiev.

Ever since, the EU and Moscow have been involved in a war of words that sometimes harks back to Cold War rhetoric.

But the EU remains Russia's biggest trading partner, and Russia is the EU's third-largest partner, mostly thanks to exports of raw materials such as oil and gas.

Economic sanctions would hurt all sides, said Dutch foreign minister Frans Timmermans. "Those consequences will be bad for everyone, but for Russia they will be far worse than for the EU. We can target other markets if we have to. (Russia) will have trouble to quickly find other customers," he said.