US Secretary of State John Kerry warned of "consequences" after his Russian counterpart made clear Moscow would respect the outcome of a referendum in Crimea this weekend on breaking away from Ukraine.
After more than five hours of face-to-face talks with Sergei Lavrov in London ended without agreement, Mr Kerry said any move by the Russian parliament to ratify a breakaway vote would amount to a "back-door annexation" of the region.
Foreign Secretary William Hague, who met with both men separately earlier, said the US and the EU could move to sanctions as early as next week it there was no easing of the tensions.
Mr Lavrov, however, was adamant that Russia would respect the will of the Crimean people as expressed in Sunday's vote.
The talks, held at the residence of the US ambassador, overran by more than two hours, raising hopes that a breakthrough was on the cards.
But Mr Lavrov finally emerged to tell reporters that there was no "common vision" on a way forward, while Mr Kerry said that he had put forward a series of "constructive ideas", only to be knocked back.
Mr Kerry said that he had reiterated President Barack Obama's warning that there would be "consequences" if Russia did not find a a way to "change course".
"If the wrong choices are made, then there will be no choice but to respond appropriately because of the gravity of this breach of international standard, this breach of international law," he added.
Mr Lavrov denied Moscow had plans for a "military intrusion" into the largely pro-Russian eastern Ukraine following clashes in the city of Donetsk between rival demonstrators, calling the claim "outrageous".
He said that despite the fact no deal was reached, the "talks were certainly useful to realise how we understand each other".