US President Barack Obama (R) meets with German Chancellor Angela Merkel to discuss the Ukraine crisis in the Oval Office of the White House in Washington May 2, 2014. [Photo/Agencies]

Ukraine crisis

Ukrainian mayor wounded by gunfire

WASHINGTON - US President Barack Obama said on Friday that the US and Germany are prepared to impose broader sanctions on Russia if it continues to destabilize Ukraine.

"We will not have a choice but to move forward with additional, more severe sanctions," if Russia disrupts Ukraine's presidential elections scheduled on May 25, Obama said at a joint news conference with visiting German Chancellor Angela Merkel at the White House.

"We are confident that we will have a package that will further impact Russia's growth and economy," Obama said, adding that the sanctions could target Russia's energy, arms and finance sectors.

Merkel said the European Union is prepared to slap a new round of sanctions on Russia with "a broad range of possibilities," stressing that sanctions on Russia show that "we are serious about our principles."

The two leaders met in Washington as Kiev launched a major offensive against militants that have seized government buildings across Ukraine's east. Russia slammed the operation, saying it would wipe out all hope for the viability of an agreement reached in Geneva last month.

While showing determination to impose more costs on Russia should it further destabilizes Ukraine, both leaders expressed the hope that the crisis in Ukraine will be resolved through diplomatic means.

"Our preference is a diplomatic resolution to this issue," Obama said, adding "our hope is that we do not have to deploy" the sanctions.

Obama added that the sanctions are not aimed at "punishing the Russian people," but dissuading Russian President Vladimir Putin from his current course. Merkel said she agreed with Obama that sanctions "are not an end in itself."

Both the US and the European Union announced fresh sanctions on more Russian officials and firms Monday, in a display of unity amid the worsening situation in Ukraine. But some European officials have expressed misgivings that the sanctions on Russia could backfire given Europe's dependence on Russia for energy.

At Friday's press conference, Obama also called on Russia to help free observers of the Organization for Security and Cooperation in Europe (OSCE) in Ukraine. He said pro-Russia militants are still holding seven observers, including four Germans.

"Russia needs to work to secure their immediate release," said Obama, adding that the US and Germany are united in expressing outrage over the "appalling" treatment of the OSCE observers.