Russia conducted new military manoeuvrs near its border with Ukraine on Thursday, and President Vladimir Putin said the world shouldn't blame his country for what he called Ukraine's "internal crisis."
In Crimea, where the public will vote on Sunday whether to break away from Ukraine and become part of Russia, jittery residents lined up at their banks to withdraw cash from their accounts amid uncertainty over the future of the peninsula, which Russian troops now control.
"These people are afraid their bank will collapse and no one wants to lose their money," said resident Tatiana Sivukhina. "Nobody knows what will happen tomorrow."
U.S. Secretary of State John Kerry and Russian Foreign Minister Sergey Lavrov plan to meet in London on Friday in a last-ditch bid to end the international standoff over the Crimean referendum, which Ukraine and the West have rejected as illegitimate.
In Berlin, German Chancellor Angela Merkel sharply criticized Russia, saying the territorial integrity of Ukraine cannot be compromised.
Speaking to Germany's Parliament, Merkel said Russia risks "massive" political and economic consequences, if it does not enter into "negotiations that achieve results" over the situation in Ukraine.
She said the only way out of the crisis is through diplomacy and that "the use of the military is no option."
On Wednesday, Moscow rejected the Ukrainian government's claim that a massive Russian military buildup near the countries' border was raising the threat of a possible invasion.
But on Thursday Russia's Defence Ministry announced that thousands of Russian troops in their regions of Rostov, Belgorod, Kursk and Tambov bordering Ukraine are involved in the exercises, which will continue until the end of the month.
In the southern Rostov region, the manoeuvrs involved parachuting in 1,500 troops, the ministry said. The drills included the military conducting large artillery exercises involving 8,500 soldiers and artillery and rocket systems in the south.
During the Ukrainian crisis, the U.S. has sent additional fighter jets to Poland and Lithuania. Russian responded on Thursday by deploying six fighter jets to Belarus, its ally.
Ukraine's parliament voted Thursday to create a 60,000-strong National Guard to help protect the country as its under-staffed and under-funded military was in disarray.
Putin, who has received his parliament's permission to use the Russian military in Ukraine, has warned that he reserves the right to "use all means" to protect Russian speakers in Ukraine from violent nationalists, even though there have been no signs they are facing such a threat.