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Though there has been no violence in Kyiv for several days, Western governments have warned Yanukovych that it risks flaring up again.
Ukraine's opposition demanded a constitutional change on Tuesday that would seriously curtail embattled President Viktor Yanukovych's powers.
Yanukovych was still weighing whom he might name as his new prime minister to calm the crisis on the streets — though rumors swirled that he could be considering a hardline ally who at the moment heads his administration.
As the Ukrainian central bank intervened again to stop panic demand for dollars weakening the hryvnia currency, Ukraine sharply criticized EU heavyweight Germany after comments by its foreign minister that sanctions should be used as a threat unless a political solution was found soon to end the crisis.
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At least six people have been killed in the past two weeks in unprecedented politically-linked violence in Kyiv, whose center is now a heavily-barricaded fortified protest zone.
Fierce clashes between riot police and squads of radical protesters have prompted global concern that the ex-Soviet republic, a substantial buffer territory of 46 million people between Russia and the EU, might plunge into civil war.
Though there has been no violence in Kyiv for several days, Western governments have warned Yanukovych that it risks flaring up again unless he can find a compromise with the opposition.
Yanukovych triggered the uprising on the streets last November when he walked away from a trade deal with the European Union in favor of closer economic ties with Russia.
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Though his move was rewarded with a $15-billion offer of credits and cheap gas from Moscow for Ukraine's ailing economy, it provoked outrage among millions of Ukrainians who dream of a European future for their country.
Caught in a geopolitical tug-of-war between Russia and the West, Yanukovych faces tough choices over his future alliances.
The United States and its EU allies are backing the protesters, though largely with words rather than deeds or cash. Russian President Vladimir Putin's hefty economic lifeline comes with a condition that he forms a government that suits Moscow.
Ukraine quickly reacted after German Foreign Minister Frank-Walter Steinmeier raised the issue of sanctions.
The foreign ministry called in Berlin's ambassador to Kyiv and said later in a statement: "It was emphasized that there was a need for an objective assessment of the development of the internal political processes of the situation in our state and that provocative statements should be avoided."
Yanukovych, according to reported comments by a political ally, has said he will not use force to clear the streets, where hundreds of protesters are camped out on Independence Square or in occupied municipal buildings.
The opposition, buoyed by Western expressions of support, pressed on Tuesday in parliament for a return to a previous constitution which would mean Yanukovych losing some of the key powers he has accumulated since being elected in 2010.
These include appointing the prime minister and entire government as well as regional governors.
The opposition also wants an unconditional amnesty for protesters detained in the unrest to be broadened into an unconditional pardon for all those being held by police.
"One of the ways out is the redistribution of powers held by the authorities. After that we can be more certain of changes in the country," said boxer-turned-politician Vitaly Klitschko, one of the main opposition leaders.
"We have to make swift changes and return to the 2004 constitution in order to even out the powers of the president," said far-right nationalist leader Oleh Tyahnibok.
(Additional reporting by Natalia Zinets; Writing by Alastair Macdonald and Richard Balmforth; Editing by Gareth Jones)