Update: EU sets Russia ultimatum, threatens sanctions

EU summit chairman Herman Van Rompuy said early Sunday that the bloc's 28 leaders tasked its executive body to "urgently undertake preparatory work for consideration within a week."

He says "everybody is fully aware that we have to act quickly."

Still, in apparent fear of an economic backlash, EU leaders shied away from immediately imposing tougher sanctions. Russia is the EU's No. 3 trading partner and one of its biggest oil and gas suppliers.

The fighting between the military and Russian-backed separatists in eastern Ukraine has claimed 2,600 lives, according to U.N. figures. NATO estimates at least 1,000 Russian soldiers are in Ukraine. Russia denies that.