Ukraine mobilized its military reserve Wednesday and urged its citizens to leave Russian territory as Moscow sharpened its demands, increasing fears of all-out war.

Kremlin chief President Vladimir Putin has defied an avalanche of international sanctions to put his forces on stand-by to occupy two rebel-held areas of eastern Ukraine.

In response, Kyiv's President Volodymyr Zelensky has put Ukraine's more than 200,000 reservists on notice that they will receive summons to return to their units.

Ukraine's security council also on Wednesday called for a state of emergency in the country -- a measure that still needs to be formally approved by parliament.

Meanwhile, Ukraine urged its approximately three million citizens living in Russia to leave, as the crisis deepened despite intense international pressure on Moscow, backed by new economic sanctions.

Western capitals say Russia has amassed 150,000 troops in combat formations on Ukraine's borders with Russia, Belarus and Russian-occupied Crimean and on warships in the Black Sea.

Ukraine has around 200,000 military personnel and Wednesday's call up could see up to 250,000 reservists aged between 18 and 60 receive their mobilization papers.

Moscow's total forces are much larger -- around a million active duty personnel -- and have been modernized and re-armed in recent years.

High cost of war

But Ukraine has received advanced anti-tank weapons and some drones from NATO members. More have been promised as the allies try to deter a Russian attack or at least make it costly.

Shelling has intensified between Ukrainian forces and Russia-backed separatists, and civilians living near the front are fearful.

Dmitry Maksimenko, a 27-year-old coal miner from government-held Krasnogorivka, told AFP that he was shocked when his wife came to tell him that Putin had recognized two Russian-backed separatist enclaves.

"She said: 'Have you heard the news?'. How could I have known? There's no electricity never mind internet. I don't know what is going to happen next, but to be honest, I'm afraid," he said.

Washington and Britain say Russia's force is poised to strike Ukraine and trigger the most serious war in Europe for decades, but Putin says he is open to negotiation -- within limits.

Russia has demanded that Ukraine be forbidden from ever joining the NATO alliance and is seeking to roll back the advance of Western influence in eastern Europe since the Cold War.

"The interests of Russia, the security of our citizens, are non-negotiable for us," Putin declared, in a video address to mark the Defender of the Fatherland Day, a public holiday.

On Tuesday, the Federation Council, Russia's upper house, gave him unanimous approval to deploy troops to two breakaway Ukrainian regions now recognized by Moscow as independent, Donetsk and Lugansk.

Russia said it had established diplomatic relations "at the level of embassies" with the separatist statelets, which broke away from Kyiv in 2014 in a conflict that cost more than 14,000 lives.

Moscow also said it would evacuate diplomatic personnel from Ukraine to "protect their lives."

Speaking to journalists, Putin on Tuesday set out a number of stringent conditions if the West wanted to de-escalate the crisis, saying Ukraine should drop its NATO ambition and become neutral.

US President Joe Biden later announced tough new sanctions against Russia for "beginning" an invasion of Ukraine, but said there was still time to avoid war.

Japan and Australia followed suit early Wednesday with their own stringent penalties for Moscow and individuals connected with the aggression against Ukraine.

Biden announced what he called the "first tranche" of sanctions, including steps to starve Russia of financing and target financial institutions and the country's "elites".

But he left the door open to a final effort at diplomacy to avert a full-scale Russian invasion.

"There's no question that Russia is the aggressor, so we're clear-eyed about the challenges we're facing," the US leader said.

Biden's address followed a wave of sanctions announced by Britain and the European Union, after Putin recognized the self-declared Donetsk and Lugansk separatist regions this week.

Germany also announced it was halting certification of the Nord Stream 2 gas pipeline from Russia.

'Full-scale invasion'

Kremlin officials have responded scornfully to the sanctions, and observers point out that energy-rich Russia has huge reserves of $639 billion and an $182-billion sovereign wealth fund to see it through a crisis.

Putin's plans remain unclear, but Western officials have been warning for weeks he has been preparing an all-out invasion of Ukraine, a move that could spark a catastrophic war in Europe.

The White House signaled it no longer believes Russia is serious about avoiding conflict, with Secretary of State Antony Blinken cancelling a meeting with Russian Foreign Minister Sergei Lavrov scheduled for Thursday.

Speaking to reporters on Tuesday, Putin said that Moscow had recognized the independence of Ukraine's separatist regions within their administrative borders, including territory still controlled by Kyiv -- raising the specter of a clash.

He added that Western-brokered peace agreements on Ukraine's conflict no longer existed and stressed that the deployment of Russian troops would "depend on the specific situation... on the ground."

NATO chief Jens Stoltenberg said the alliance had "every indication" that Moscow "continues to plan for a full-scale attack on Ukraine."

British foreign minister Liz Truss told Sky News it was "likely" that Putin would "follow through on his plan for a full-scale invasion of Ukraine".