KUALA LUMPUR/SLAVIANSK, Ukraine (Reuters) - Pro-Russian rebels paraded European monitors they are holding in eastern Ukraine on Sunday, freeing one but saying they had no plans to release another seven as the United States and Europe prepared new sanctions against Moscow.
U.S. President Barack Obama called for the United States and Europe to join forces to impose stronger measures to restrain Moscow. In a move senior U.S. officials said may come as early as Monday, the White House said it would add names of people close to President Vladimir Putin and firms they control to a list of Russians hit by sanctions over Ukraine, and also impose new restrictions on high-tech exports.
The European Union is expected to follow suit by adding to its own list of targeted Russian people and firms, but Washington and Brussels have yet to reach agreement on wider measures designed to hurt the Russian economy more broadly.
In Donetsk, where pro-Russian rebels have proclaimed an independent "people's republic", armed fighters seized the headquarters of regional television and ordered it to start broadcasting a Russian state TV channel.
Speaking during a visit to Malaysia, Obama said restraining Russian President Vladimir Putin's ambitions in Ukraine would depend on the United States and its allies finding a unified position on tighter sanctions.
"We're going to be in a stronger position to deter Mr. Putin when he sees that the world is unified and the United States and Europe is unified rather than this is just a U.S.-Russian conflict," Obama told reporters.
White House deputy national security adviser Tony Blinken said the new U.S. measures would be focused mostly on adding to a list of those barred from travel to the United States and hit by asset freezes.
"We're going to save a little news for Monday but what I can tell you is this," Blinken told CBS television. "We will be looking to designate people who are in (Putin's) inner circle, who have a significant impact on the Russian economy. We'll be looking to designate companies that they and other inner-circle people control."
He added: "We'll be looking at taking steps, as well, with regard to high-technology exports to their defence industry. All of this together is going to have an impact."
The standoff over Ukraine, an ex-Soviet republic of about 45 million people, has dragged relations between Russia and the West to their lowest level since the end of the Cold War.
After Ukrainians overthrew a pro-Russian president, Putin overturned decades of international diplomacy last month by announcing the right to use military force on neighbouring territory. He has seized and annexed Ukraine's Crimea peninsula and massed tens of thousands of troops on the frontier.
Heavily armed pro-Russian gunmen have seized buildings in towns and cities across eastern Ukraine. Kiev and its Western allies say the uprising is directed by Russian agents. Moscow denies it is involved and says the uprising is a spontaneous reaction to oppression of Russian speakers by Kiev.
An international agreement reached this month calls on rebels to vacate occupied buildings, but Obama said Russia had not "lifted a finger" to push its allies to comply.
"In fact, there's strong evidence that they've been encouraging the activities in eastern and southern Ukraine."
The Organisation for Security and Cooperation in Europe (OSCE) has sent unarmed monitors to try to encourage compliance with the peace deal. The pro-Russian rebels seized eight European monitors three days ago and have been holding them at their most heavily fortified redoubt in the town of Slaviansk.
One, a Swede, was permitted to leave on Sunday after OSCE negotiators arrived to discuss their release. A separatist spokeswoman said the prisoner had been let go on medical grounds, but there were no plans to free the others.
The captives, from Germany, the Czech Republic, Denmark, Poland and Sweden, were paraded before reporters on Sunday and said they were in good health.
"We have no indication when we will be sent home to our countries," the group's leader, German Colonel Axel Schneider, told reporters as armed men in camouflage fatigues and balaclavas looked on. "We wish from the bottom of our hearts to go back to our nations as soon and as quickly as possible."
Germany denounced the appearance and said Moscow must press their captors to free the prisoners.
"The public parading of the OSCE observers and Ukrainian security forces as prisoners is revolting and blatantly hurts the dignity of the victims," Foreign Minister Frank-Walter Steinmeier said in a statement.
"It is an infringement of every rule of behaviour and standards that are made for tense situations like this. Russia has a duty to influence the separatists so that the detained members of the OSCE mission are freed as soon as possible."
The OSCE, a European security body, includes Russia. Its main Ukraine mission was approved by Moscow, although the Europeans held in Slaviansk were on a separate OSCE-authorised mission that did not require Russia's consent.
Vyacheslav Ponomaryov, the rebel leader who has declared himself mayor of Slaviansk, has described them as prisoners of war and said the separatists were prepared to exchange them for fellow rebels in Ukrainian custody.
Washington is more hawkish on further sanctions than some of its European allies, which has caused a degree of impatience among some U.S. officials. Many European countries are worried about the risks of imposing tougher sanctions - the EU has more than 10 times as much trade with Russia as the United States and imports about a quarter of its natural gas from Russia.
But the top Republican on the U.S. Senate Foreign Relations Committee said the Obama administration's sanctions on Russian individuals had not gone far enough.
"I think we need to put sectoral sanctions in place," Senator Bob Corker told CBS. "To me, hitting four of the largest banks there would send shockwaves into the economy. Hitting (Russian gas giant) Gazprom would certainly send shockwaves into the economy," he said.
At the Donetsk television headquarters, about 400 pro-Russian demonstrators chanted: "Russia! Russia!" and "Referendum!" - a call for a vote like one in Crimea that preceded its annexation by Russia last month. Four separatists in masks controlled access at the entrance, and more masked gunmen in camouflage fatigues could be seen inside.
Oleg Dzholos, the station's director, who came outside to speak to reporters, said the people who seized the building had ordered him to change the programming.
"They used force to push back the gates," he said. "There were no threats. There were not many of my people. What can a few people do? The leaders of this movement just gave me an ultimatum that one of the Russian channels has to be broadcast."
Ponomaryov, the rebel leader in Slaviansk, said his men had captured three officers with Ukraine's state security service who, he said, had been mounting an operation against separatists in the nearby town of Horlivka.
The Russian television station Rossiya 24 showed footage it said was of a colonel, a major and a captain. They were shown seated, with their hands behind their backs, blindfolded, and wearing no trousers. At least two had bruises on their faces.
Ukraine's State Security Service said the three had been part of a unit which went to Horlivka to arrest a suspect in the murder of Volodymyr Rybak, a pro-Kiev councillor whose body was found last week in a river near Slaviansk.
(Additional reporting by Tatyana Makeyeva in Donetsk, Ukraine, Natalia Zinets in Kiev, Nigel Stephenson and Lidia Kelly in Moscow, Kylie MacLellan in London, and Eric Beech in Wsahington; Writing by Christian Lowe, Giles Elgood, Peter Graff and Peter Cooney; Editing by Sonya Hepinstall and Sandra Maler)