KIEV, Ukraine - With the crisis consuming the Crimean peninsula showing no signs of abating, Western officials scrambled Monday to determine what actions, if any, could prod Russian President Vladimir Putin to pull back his military forces in eastern Ukraine.
U.S. Secretary of State John Kerry was heading to Kiev in an expression of support for Ukraine's sovereignty, and the U.S. and EU threatened a raft of punitive measures as it called an emergency summit on Ukraine for Thursday.
"If in fact (the Russians) continue on the current trajectory that they're on, we are examining a whole series of steps - economic, diplomatic - that will isolate Russia and will have a negative impact on Russia's economy and its status in the world," President Barack Obama said Monday at the White House. "We've already suspended preparations for the G-8 summit, and we would expect there would be further follow-up on that."
On Monday evening, the Pentagon announced the the United States is putting all military exercises with Russia on hold. The U.S. trade representative's office also said Washington was suspending upcoming trade and investments talks with Russia because of events in Ukraine.
"Unilateral U.S. sanctions against Russia are not going to have much an effect if Europe remains a haven for Russian banks and Russian oligarchs to stash and invest their money," he said. "If the United States shuts its economic doors to Russia and Europe leaves its doors open, there won't be much change in behavior from Moscow."
So far, the signs from Europe are mixed. Late Monday, the EU threatened to freeze visa liberalization and economic cooperation talks and boycott the G-8 summit in Russia if Moscow does not back down on the Crimean peninsula by the Thursday summit.
On the other hand, a British government document caught by a photographer's lens suggests that officials there are against imposing economic sanctions on Russia.
The document, captured by a photographer outside the British prime minister's Downing Street office as it was carried in by an adviser, says Britain "should not support for now trade sanctions or close London's financial center to Russians," according to the BBC, which first reported the blooper Monday.
It's not clear whether the document presents a settled U.K. position or just the view of one set of officials within government. Britain's views on sanctions are important in part because London is a key hub for Russian investment. Downing Street had no immediate comment.
Adding to the uncertainty of the situation, even if the U.S. and EU come together on sanctions and other punishments, initial indications are the Putin is playing a different game altogether.
According to The New York Times, German Chancellor Angela Merkel "told Mr. Obama on Sunday that after speaking with Mr. Putin she was not sure he was in touch with reality, people briefed on the call said. 'In another world,' she said."
In the meantime, it appears Russia is driving the agenda on what to do next about Ukraine's political turmoil, using a bold mix of diplomacy and military might.
Foreign Minister Sergey Lavrov said in Geneva at the beginning of a U.N. Human Rights Council session Monday that Ukraine should return to the Feb. 21 agreement signed by pro-Russian President Viktor Yanukovych - but not Moscow - aimed at ending Ukraine's crisis. Yanukovych fled the country after sealing the pact with the opposition and foreign ministers of France, Germany and Poland to hold early elections and surrender many powers.
"Instead of a promised national unity government," Lavrov said, "a 'government of the victors' has been created."
Then came dramatic claims from Ukraine that Russian troops had issued an ultimatum for two Ukrainian warships to surrender or be seized - prompting Ukraine's acting president to accuse Russia of "piracy." This was one of several ultimatums allegedly made by Russia's occupying forces in Crimea.
Four Russian navy ships in Sevastopol's harbor were blocking Ukraine's corvette Ternopil and the command ship Slavutych, Ukrainian authorities said. Acting president Oleksandr Turchynov said commanders and crew were "ready to defend their ships ... They are defending Ukraine."
Vladimir Anikin, a Russian defense ministry spokesman in Moscow, dismissed the report of a Russian ultimatum as nonsense but refused to elaborate.
It was not clear what the West could do to make Russia back down. The clearest weapon at the disposal of the EU and U.S. appeared to be economic sanctions that would freeze Russian assets and pull the plug on multibillion-dollar deals with Russia.
Already the economic fallout for Russia over its Crimea takeover was being intensely felt: Stocks worldwide are plunging amid the escalating conflict, and Russia's stock market dropped about 10 percent on Monday and its currency fell to its lowest point ever against the dollar. But the economic consequences of antagonizing Russia were also acute for Western Europe: The EU relies heavily on Russian natural gas flowing through a network of Ukrainian and other pipelines.
By Monday it was clear that Russia had effectively turned Crimea into a protectorate.
Russian soldiers controlled all Crimean border posts Monday, as well as all military facilities in the territory. Troops also controlled a ferry terminal in the Ukrainian city of Kerch, just 12 miles across the water from Russia. That intensified fears in Kiev that Moscow will send even more troops into the peninsula via that route.
Border guard spokesman Sergei Astakhov said the Russians were demanding that Ukrainian soldiers and guards transfer their allegiance to Crimea's new pro-Russian local government.
"The Russians are behaving very aggressively," he said. "They came in by breaking down doors, knocking out windows, cutting off every communication."
He said four Russian military ships, 13 helicopters and 8 transport planes had arrived in Crimea in violation of agreements that permit Russian to keep its Black Sea fleet at the naval base in Sevastopol. The agreement limits the deployment of additional forces at the base.
Ukraine's prime minister admitted his country had "no military options on the table" to reverse Russia's military move into its Crimea region. Pro-Russian soldiers surrounded Ukrainian military facilities on the peninsula, completing a military takeover without firing a single shot.
In Geneva, Lavrov attempted to deflect international blame back onto the West.
"Those who are trying to interpret the situation as a sort of aggression and threatening us with sanctions and boycotts, these are the same partners who have been consistently and vigorously encouraging the political powers close to them to declare ultimatums and renounce dialogue," Lavrov said.
"We call upon them to show a responsibility and to set aside geopolitical calculations and put the interests of the Ukrainian people above all."
Lavrov on Monday justified the use of Russian troops in Ukraine as a necessary protection for his country's citizens living there. "This is a question of defending our citizens and compatriots, ensuring human rights, especially the right to life," Lavrov said.
The crisis in the Ukraine has also put President Obama's credibility at stake, according to CBS News senior security contributor Mike Morell, a former deputy director of the CIA.
"The only thing that Vladimir Putin understands is tough (action), and there has to be a tough response for Putin to pay attention," Morell said on "CBS This Morning." "The things we've done already are pretty weak and Putin will see them as weak. Military action is not an option for obvious reasons. The only real option is economic sanctions. That could bite the Russians, but do we really want to get into an economic war with Russia, with a country that produces the second-most oil in the world and a country that produces the second-largest amount of natural gas in the world? He can cause real problems."
Morell said that the risk now is that war could spread. "Eastern Ukraine is largely Russian-speaking, and that could give Putin a reason to move into eastern Ukraine and have a larger war between Ukraine and Russia."
Asked why Putin is doing this, Morell said, "I think there's two reasons. One is, it's been long-time Russian foreign policy in general and Putin's desire in particular to establish control -- complete control -- over all of those states that used to be part of the former Soviet Union and it is also his strong desire to undermine the United States at any chance he can. So moving into Crimea sends a very powerful message not only to Ukraine but to all of those countries of the former Soviet Union, 'Don't mess with me.' And to do it a day after the president tells him not to, gives the United States a black eye."