Ukraine will respond with military action if Russia attempts to annex the country's mainly Russian-speaking eastern regions, interim prime minister Arseniy Yatsenyuk said.
"I want to officially warn Russia: we will respond firmly, including through military means, against any attempt to seize Ukraine, to cross borders, or annex eastern or other regions by Russian troops," Mr Yatsenyuk was quoted as saying in Brussels on the government website.
Mr Yatsenyuk also appealed to the West to "respond appropriately" as Moscow moves to attach Ukraine's Crimea Peninsula to the Russian Federation.
"Russia has violated international law and undermined the nuclear non-proliferation regime," the premier said.
"Russia has carried out an armed robbery against an independent neighbouring country."
Under a milestone agreement in 1994, Russia agreed to respect Ukraine's territorial integrity while Kiev renounced its Soviet-era nuclear arms.
"Everyone should understand that there is a price to pay for stability in the world," said Mr Yatsenyuk.
"There are two means: either with victims (of a conflict) or with euros and dollars," he said in reference to economic sanctions.
"It is better to sacrifice euros and dollars than to cry over thousands of deaths in a bloody war.
"I hope that our European partners understand that. Afterwards it will be too late to use other types of sanctions," he added.
It comes as US Defense Secretary Chuck Hagel received assurances from his Russian counterpart, Sergei Shoigu, that Russian troops along Ukraine's eastern border had no plans to enter the country, a Pentagon spokesman said.
Rear Admiral John Kirby said Mr Hagel spoke to Mr Shoigu for nearly an hour by telephone and was "clear and firm" in telling him that with Russian forces in control in Crimea, they were responsible for any incidents there.
During the call, Mr Hagel asked for an explanation of why Russia was deploying forces along Ukraine's eastern and southern borders and was assured by Mr Shoigu they were conducting exercises and had no intention of crossing the border, the spokesman said.
Ban 'deeply concerned' by Ukrainian crisis
UN Secretary-General Ban Ki-moon has said at a meeting with Russian President Vladimir Putin that he was "deeply concerned" by the situation involving Ukraine and Russia.
Mr Ban is on a visit to both nations to encourage all parties involved in the crisis over Ukraine and its Crimea region to find a peaceful solution.
Western nations say Russia has illegally annexed the region.
Russia's lower house of parliament today overwhelmingly approved a treaty to annex Crimea from Ukraine.
The move takes the Black Sea peninsula a step closer to joining the Russian Federation.
The Federation Council upper house will hold a similar vote tomorrow, completing ratification of a treaty that was signed by Mr Putin on Tuesday.
Earlier, Ukraine's parliament said Kiev will never recognise Russia's annexation of Crimea and will fight for the "liberation" of the Black Sea peninsula.
The initiative of acting president Oleksander Turchynov said: "Ukraine will never cease to fight for the liberation of Crimea as long and painful as this can be."
Ukraine's ambassador to the United Nations in Geneva warned there are signs that Moscow was preparing to launch a large-scale assault in parts of the country.
"There are indications that Russia is braced to unleash a full-blown intervention on Ukraine's east and south," Yurii Klymenko told reporters.
Meanwhile, a Ukrainian navy commander and several other hostages detained by Crimean authorities yesterday have been released.
A Ukrainian military spokesman said Admiral Sergiy Gayduk had been driven away from a navy compound in Russian-controlled Crimea by what appeared to be Russian special forces.
Russian Defence Minister Sergei Shoigu asked the authorities in Crimea this morning to free the detained hostages and allow them safe passage out of the region.
Voters in Crimea, which has a narrow ethnic Russian majority, overwhelmingly favoured joining Russia in a weekend referendum Ukraine's government and the West say was illegal.
The treaty goes into force once ratified and stipulates that Crimea will be fully integrated into Russia after a transition period ending on 1 January, 2015.
Russia has begun issuing Russian passports to Crimeans, Interfax quoted Russia's immigration agency chief, Konstantin Romodanovsky, as saying.
Ukraine is in no hurry to impose a visa regime on Russia in response to Moscow's takeover of the Crimea peninsula, Prime Minister Arseny Yatsenyuk was quoted as saying this morning.
Ukrainian border guards in Crimea have started redeploying to regions on the mainland, a senior official said.
Pavlo Shysholin, deputy head of the state border guard service, told a news conference about 1,000 civilians had so far left the peninsula.
Ukraine's Security Council decided yesterday to impose rules within days to require Russians travelling to Ukraine to obtain visas.
Mr Yatsenyuk is in Brussels to sign the political part of an association agreement with the European Union.
Russia takes over Ukrainian factory
Russian authorities have taken over a Ukrainian-owned confectionery factory located in the Russian city of Lipetsk and halted production, the Ukrainian government said.
Russian riot police took control of the Roshen factory yesterday and authorities had produced no documentation to justify "bursting on to the company's property", a joint statement from Ukraine's Foreign and Economic Ministries said.
A company spokeswoman said Russian authorities were investigating the firm, which was caught up in a trade row between Ukraine and Russia last year.
Roshen's accounts in Russian banks had been frozen on 14 March 14, she added.
Last year, Russia also halted confectionery imports from Roshen in Ukraine citing health concerns, part of a series of trade restrictions on both sides.
The joint ministry statement said the incident "set a dangerous precedent, which could backfire".
"Now there is reason to believe that Russian authorities are setting about the actual confiscation of Roshen's production facilities located in Russia," the statement said.
EU to widen list of Russian officials subject to sanctions
European Union leaders have agreed to widen the list of Russian officials subject to personal sanctions over Moscow's seizure of Crimea from Ukraine.
They have asked the European Commission to prepare for broader economic sanctions if the crisis escalates.
Ms Merkel said the EU was ready to support Ukraine's new government financially, provided it reached a deal with the International Monetary Fund, on which she said talks had made substantial progress and a deal was expected soon.
She told a news conference after the first day of an EU summit in Brussels that the EU was prepared to send an observer mission to Ukraine but would prefer the pan-European security watchdog OSCE to send monitors if Russia will agree on a mandate.
Ms Merkel declined to say how many names would be added to the EU blacklist of people subject to visa bans and asset freezes but said they were of the same level as the 21 mid-ranking Russian and Crimean officials sanctioned last week.