Ukrainian Prime Minister Arseniy Yatsenyuk charged Friday that Moscow "wants to start World War III" by seeking to take over Ukraine militarily and politically.
"Attempts at military conflict in Ukraine will lead to a military conflict in Europe,'' he told an interim cabinet meeting that was broadcast live and translated by Reuters.
"The world has not yet forgotten World War II, but Russia already wants to start World War III," he said.
In another development, a Ukrainian foreign ministry spokesman, Yevhen Perebyinis, said at a briefing on Friday that contact had been lost with members of a military verification mission of the Organization for Security and Cooperation in Europe (OSCE) in Donetsk region, in the east.
Perebyinis said that "according to preliminary report, they could be captured by terrorists," Interfax Ukraine reports. The OSCE mission was sent into disputed areas to try to calm tensions. There have been no confirmation of the report that the members of the team may have run into trouble.
Russia announced new military exercises Thursday involving ground and air forces near its border with Ukraine. The latest move follows stepped-up operation by Ukraine to remove pro-Russian insurgents from occupied buildings in the east. At least two people were killed in a clash at another checkpoint.
As tensions mounted, seven people were injured early Friday when a hand grenade was tossed at a checkpoint manned by pro-Ukrainian activists outside the Black Sea port of Odessa in southeastern Ukraine.
Local police spokesman Volodymyr Shablienko said unknown men threw the explosive device at a checkpoint set up by local authorities and activists.
Odessa residents have built several checkpoints outside of the city in an effort to block pro-Russian separatists entering from Moldova's breakaway territory of Transdniestria.
Transdniestria, which declared indeendence in the early 1990s, is located about 50 miles west of Odessa. It is home to Russian peacekeepers and Russian troops guarding a cache of Soviet-era arms.
A senior official traveling in Asia with President Barack Obama said he is likely to call European leaders Friday to discuss the possibility of further economic sanctions on Russia. The official spoke on condition of anonymity because there had been no official announcement.
Secretary of State John Kerry charged on Thursday that Russia is not abiding by last week's Geneva agreement to de-escalate the crisis in Ukraine. Russia, he said, "has refused to take a single step in the right direction."
"If Russia continues in this direction, it will be not just a grave mistake, it will be an expensive mistake," he told reporters at the State Department.
Without specifying any specific sanctions, he warned that if Moscow doesn't change course, "the world will make sure costs for Russia will only grow."
On Friday, Russian Foreign Minister Sergei Lavrov rejected the stepped up pressure from Washington.
"The West wants -- and this is how it all began -- to seize control of Ukraine because of their own political ambitions, not in the interests of the Ukrainian people," Lavrov said.
Any new sanctions would come on the heels of a decision by Standard & Poor's credit agency to cut Russia's credit rating for the first time in five years.
S&P's downgrading of Russia's crediting rating to BBB- brings it only one step above the so-called "junk" level. It follows a slowing of economic growth in Russia to 0.8 percent in the first quarter and capital flight of $70 billion by anxious investors. Russian officials have said more capital was taken out of the country in the first quarter of the year than in all of 2013.
Russian Economic Development Minister Alexei Ulyukayev sought to play down the downgrade, calling it "partly politically motivated."
Contributing: Associated Press