The United States on Tuesday denounced moves by pro-Russian separatist groups in eastern Ukraine to organize what it called a "bogus" referendum.
US Secretary of State John Kerry slammed the efforts to organize a referendum on May 11 in the eastern cities of Donetsk and Luhansk as "contrived."
"We flatly reject this illegal effort to further divide Ukraine. And its pursuit will create even more problems in the effort to try to de-escalate the situation," he told reporters, after meeting with EU foreign policy chief Catherine Ashton.
"We are not going to sit idly by while Russian elements fan the flames of instability instead of fulfilling the commitments that we made."
Kiev and its Western backers believe Moscow is trying to ensure the planned "referendum" goes ahead in a bid to sow chaos ahead of nationwide presidential election due to be held two weeks later.
The West considers the May 25 presidential elections as crucial to restoring legitimacy to the government of the former Soviet republic, after interim leaders were installed by the parliament when pro-Moscow president Viktor Yanukovych fled in the face of widespread pro-democracy protest.
Assistant Secretary for Europe Victoria Nuland said the presidential elections on May 25 will be "the most pluralistic election that there has ever been in Ukraine" with some parties fielding more than one candidate after splits.
"And far more pluralistic than anything that's been seen in Russia."
But she voiced concerns about whether the people in eastern Ukraine would "have the chance to vote for their candidate" given the tensions on the ground with pro-Russia militias controlling several towns.
The OSCE was expected to send in 1,000 observers and the US was supporting a further 3,000 observers, she said.
"This will be the best observed transatlantic elections for many, many years," Nuland said, speaking at the US Institute of Peace think-tank.
State Department spokeswoman Jen Psaki also warned that "if Russia takes the next step" to move into eastern Ukraine and annex it as it did in March with Crimea, "harsh EU and US sanctions will follow."
Washington and the EU have already sanctioned dozens of Russians and Ukrainians blamed for fueling the instability in Ukraine. But they have so far held off from imposing more biting sanctions against the key banking, mining and energy sectors.
Ashton renewed calls for Russia to help end "illegal actions by armed separatist groups."
Russian President Vladimir Putin has so far held off ordering an invasion to "protect" Ukraine's Russian-speaking population although Moscow claims to be receiving "thousands" of calls for help from eastern Ukraine.
But he has kept an estimated 40,000 troops on the border for the past two months.