The United States warned Russia on Thursday it had only "hours" to prove it was helping disarm Ukrainian insurgents whose tenuous truce with Kiev was due to expire by the weekend.
US Secretary of State John Kerry's ultimatum was delivered a day before Ukrainian President Petro Poroshenko signs the final chapters of an historic EU accord that nudges his country toward eventual membership and pulls it firmly out of Russia's reach.
The West is scrambling to save a temporary ceasefire and nascent peace talks that pro-Russian separatists who are now threatening the ex-Soviet state's survival agreed to at the start of the week.
Poroshenko on Thursday pushed back the expiry of the truce -- broken on repeated occasions but still having succeeded in tempering the worst of the violence in the Russified eastern rustbelt -- for a few hours until Friday at 1900 GMT.
But Ukraine's new Western-backed leader and separatist commanders have set up a third round of indirect negotiations in the eastern hub of Donetsk that theoretically agree another extension.
The Kremlin said Putin assured German Chancellor Angela Merkel that he fully the resumption of meaningful dialogue between the warring sides.
Putin and Merkel discussed "the need to extend the truce, establish regular contact group meetings, and the release of forcibly detained individuals," the Kremlin said in a statement.
But Poroshenko told a European parliamentary assembly in Strasbourg that "up to now, unfortunately, the support (from Russia) has been insufficient".
The 11-week insurgency has killed more than 435 people and shattered the delicate system of trust that developed between Moscow and the West since the Cold War.
Putin is strongly suspected of orchestrating the Ukrainian uprising after having seized its Crimea peninsula in reprisal for the February ouster in Kiev of a Moscow-backed president.
The Kremlin chief denies exerting control over the fighters and is yet to address in public reports from Kiev and Washington of rocket launchers and even tanks crossing the Russian border into the conflict zone.
US Secretary of State John Kerry stressed in Paris that "it is critical for Russia to show in the next hours, literally, that they're moving to help disarm the separatists, to encourage them to disarm, to call on them to lay down their weapons and to begin to become part of a legitimate process."
The State Department added that sanctions would be also discussed by EU leaders on Friday when they sign the full Association Agreement with Ukraine that was ditched by the ousted pro-Russian president in November and now lies at the heart of the raging crisis.
The punitive steps under deliberation would target Russia's financial and defence sectors at a time when its export-dependent economy is on the verge of slipping into another recession.
US media reports said one particularly painful step under consideration would prohibit the export of technology that could help Russia explore for oil and gas in the Arctic -- a major ambition of powerful state-held energy firms.
Poroshenko's Western allies have long urged Kiev to amend Ukraine's basic law and devolve the central authorities' extensive controls over regional affairs.
Washington views such a system as more efficient. But it also hopes that it may appease local leaders and Russian-speaking voters enough to suspend their sovereignty drive.
Russia counters that only an outright switch to a federal system in which regions can adopt their own foreign trade policies could work in a country as culturally splintered as Ukraine.
Poroshenko on Thursday submitted to parliament constitutional changes that stop well short of meeting the Kremlin's demands.
His proposal would enshrine in the constitution the use of Russian in independence-minded regions such as Donetsk and Lugansk.
Poroshenko said he was also willing to let local legislatures nominate regional governors instead of having them named directly by the president.
But analysts at the Eurasia Group political risk consultancy said there remained "an unbridgeable gap" between what Russia wanted and what Poroshenko was willing to cede.
"Ceding this level of autonomy to regions is impossible for President Poroshenko, who must demonstrate to his own constituents that... while relations with Russia are critical, capitulation to Kremlin pressure is not acceptable," it stressed.