The United States has suspended all military engagements with Russia over its military move into the Ukrainian region of Crimea. It has also stopped trade and investment talks.
The announcement from the Pentagon on Monday came hours after President Barack Obama warned that the US will look at a series of economic and diplomatic sanctions to isolate Moscow. Mr Obama said Russia has violated international law with its military intervention in Ukraine.
Russia is moving more troops into Crimea after Russian President Vladimir Putin declared last week that Moscow had the right to intervene to protect Russian citizens in Ukraine. The decision has sparked the biggest crisis between Russia and the West since the Cold War.
Russian forces had for days surrounded a ferry terminal on the Kerch strait, which separates the Crimean peninsula and southern Russia, but had not taken control of Ukraine's border guard station.
A border guard spokesman said Russian troops seized the checkpoint after guards tried to stop two buses carrying seven armed men, and the next ferry brought three truckloads of soldiers across. The Ukrainian guards said they had seen Russia assembling an armoured column on its side of the 4.5km wide strait, Reuters reports.
On the ground in Perevalnoye, between the Crimean capital of Simferopol and the Black Sea, hundreds of Russian troops in trucks and armoured vehicles, without national insignia on their uniforms, were surrounding two military compounds. The armed men were confining Ukrainian soldiers, who have refused to surrender, as virtual prisoners.
Though no shots have been fired Crimea is now almost under complete control of Russian forces and local pro-Moscow militia who patrol both government buildings and the perimeters of Ukrainian barracks.
Meanwhile, a spokesperson for Vladimir Putin has ordered troops that took part in military exercises this week to return to base. Dmitry Peskov said the exercises, which Moscow denies are linked to events in Ukraine, had been a success. The exercises took place across western Russia - an area which borders Ukraine.
Russia defends actions
At the United Nations in New York on Monday, Russia defended its military intervention in Ukraine.
At the angry emergency session of the UN's Security Council, Russia's envoy Vitaliy Churkin justified his country's actions, brandishing a letter from ousted Ukrainian president Viktor Yanukovych to Vladimir Putin asking that Russia protect civilians and help prevent civil war.
In it he called on Russia to send troops to restore order in the face of acts of terrorism and violence carried out under Western influence, the BBC reports.
US ambassador Samantha Power was scornful, saying Russia was arguing up is down, black is white, and its act of aggression was mobilising against an imaginary threat.
Russia denied issuing an ultimatum to Ukrainian forces there to surrender or face assault.
In Geneva, Russia's Foreign Minister Sergei Lavrov said troops would be needed in Ukraine until the political situation there had normalised.
Addressing the UN Human Rights Council, he said Moscow had to defend its citizens in Ukraine from ultra-nationalist groups.
Growing world alarm
There is growing alarm at the events in Ukraine and the crisis threatens to blow up into the biggest test for global diplomacy - and relations between Moscow and the West - since the fall of the Berlin Wall in 1989.
The United States and the European Union said they were looking at a range of sanctions against Russia for its threat to use force against an ex-Soviet neighbour for the first time since a brief 2008 conflict with Georgia, AFP reports.
Ukraine's new Western-leaning leadership is due to receive a morale boost on Tuesday, when US Secretary of State John Kerry meets with them in Kiev to "reaffirm the United States' strong support for Ukrainian sovereignty, independence, territorial integrity", the US State Department said.
NATO is also to hold an urgent meeting on Tuesday at Poland's request, after the neighbour of Ukraine raised concerns about its own security in light of the crisis.
The world's richest nations have already threatened to strip Moscow of its coveted seat at the Group of Eight industrialised nations for menacing Ukraine.
But Europe and Washington appear to have limited options in dealing with Russian leader Vladimir Putin - a veteran strongman with mass domestic appeal who has cracked down on political freedoms.
At a meeting in Brussels on Monday, European Union foreign ministers condemned Russia's military action and called for international mediation to avert further escalation. EU leaders will hold an emergency summit on Thursday to discuss how to help Ukraine.
World markets have plunged and oil prices spiked on fears of an all-out offensive that would pit nuclear-armed Russia against its Western-backed neighbour.