The US and its allies on Wednesday prepared new sanctions on Moscow over civilian killings in northern Ukraine, which President Volodymyr Zelenskiy described as "war crimes" demanding punishment.
Western sanctions on Russia over its nearly six-week invasion of its neighbour gained new impetus this week after dead civilians shot at close range were discovered in the Ukrainian town of Bucha.
Russia denied targetting civilians in Bucha and described evidence presented as a "monstrous forgery" staged by the West to discredit it.
New sanctions set to be unveiled Wednesday are in part a response to Bucha, the White House said.
The measures, coordinated between Washington, Group of Seven advanced economies and the European Union, will target Russian banks and officials and ban new investment in Russia, the White House said.
Proposed EU sanctions, which the bloc's 27 member states must approve, would ban buying Russian coal and prevent Russian ships from entering EU ports.
EU executive Ursula von der Leyen said the bloc was working on banning oil imports, as well. Europe, which obtains about a third of its natural gas from Russia, has been wary of the economic impact a total ban on Russian energy would bring.
But signalling strengthening EU resolve, Germany's foreign minister said the coal ban was the first step toward an embargo on all Russian fossil fuel imports. Ukraine says banning Russian gas is vital to securing a deal to end the war in peace talks.
After an impassioned address to the UN Security Council on Tuesday, Zelenskiy said new sanctions "against Russia must be commensurate with the gravity of the occupiers' war crimes," calling it a "crucial moment" for Western leaders.
New Zealand said on Wednesday it would impose a 35 per cent tariff on all imports from Russia and extend export bans on industrial products connected to strategic Russian industries.
"The images and reports emerging of atrocities committed against civilians in Bucha and other regions of Ukraine is abhorrent and reprehensible, and New Zealand continues to respond to (Russian President Vladimir) Putin’s mindless acts of aggression," Foreign Minister Nanaia Mahuta said in a statement.
US chipmaker Intel Corp said on Tuesday it had suspended business operations in Russia, joining a slew of companies to exit the country.
In the small Russian city of Kaluga thousands of auto workers have been furloughed and food prices are soaring as Western sanctions hit its flagship foreign carmakers.
Ukrainian officials say between 150 and 300 bodies might be in a mass grave by a church in Bucha, north of the capital Kyiv.
Satellite images taken weeks ago show bodies of civilians on a street in the town, a private US company said, undercutting Russia's claims that Ukrainian forces caused the deaths or that the scene was staged.
Since launching its invasion on February 24, Russia has failed to capture a single major city in what it calls a "special military operation" aimed at demilitarising Ukraine.
The Kremlin's position is rejected by Ukraine, a parliamentary democracy, and the West as a pretext for an unprovoked invasion that has uprooted a quarter of the country's population.
Russia's forces mostly withdrew from near Kyiv last week after getting bogged down by Ukrainian resistance. Russia has now shifted its offensive towards Ukraine's south and east.
The US has agreed to provide an additional $100 million in assistance to Ukraine, including Javelin anti-armour systems, the Pentagon said on Tuesday.
In the besieged southern port of Mariupol, where tens of thousands are trapped with scant access to food or water, a Dominica-flagged cargo ship sank on Tuesday after being targetted by Russian missile strikes, the vessel's flag registry said.
Russia did not respond to a request for comment. Its armed forces said on Tuesday they had shot down two Ukrainian military transport helicopters that were trying to leave the city.
Ukraine's armed forces general staff said attacks in Mariupol were continuing, but did not give any details.
In the east, where Ukraine's second-largest city of Kharkiv has been among Russia's main targets, the general staff said Ukrainian forces had destroyed three Russian tanks and around 20 other armoured vehicles.