An unusually frank Nato Secretary General issued an unequivocal warning on the course of events should Russia attack Latvia or Estonia.
The West responds with sanctions and closer political ties with Ukraine as Russia's President seals the annexing of Crimea to much fanfare.
Supporters of the controversial fracking industry believe shale gas could be America's most potent weapon in the stand-off with Russia.
Ukraine's new president Petro Poroshenko has called for dialogue with the east of the country, gripped with a violent, pro-Russian insurgency, as he took the oath of office.
Calling for armed groups to lay down their weapons, he promised Ukraine's parliament "I will bring you peace" but did not indicate whether forces would scale back their offences against the insurgency.
As president, Mr Poroshenko is commander-in-chief of the military and appoints the defence and foreign ministers.
In his inaugural address, attended by US vice president Joseph Biden and senator John McCain, Mr Poroshenko promised amnesty for those without "blood on their hands". He said:
I am calling on everyone who has taken arms in their hands - please lay down your arms.
Ukrainian President Petro Poroshenko has said that "Crimea was, is, and will be Ukrainian" but stated he does not want war or revenge, during his inaugural speech.
He said: "I don't want war; I don't want revenge. I want peace and I want peace to happen," Poroshenko told parliament after taking the oath.
In his inaugural speech he said that he would offer a safe corridor for Russian fighters to go home and that he would "guarantee immunity to all."
He said: "Please, lay down the guns and I guarantee immunity to all those who don't have bloodshed on their hands."
Ukraine's Petro Poroshenko has been sworn in as president of his troubled country as government forces continued to battle pro-Russian separatists in the east.
He will be Ukraine's fifth president since independence in 1991.
During his inauguration ceremony in parliament, he took an oath to protect Ukraine's sovereignty and independence and to safeguard the rights and freedoms of its citizens.
Poroshenko, who won a landslide victory after campaigning on the slogan "Live in a new way", is expected lay out a programme for restoring stability and moving Ukraine into the European mainstream.
Petro Poroshenko is to be sworn in as president of Ukraine, after his victory in the May 25 poll.
Yesterday, he met with Russian President Putin briefly at D-Day commemorations, saying it could be the start of dialogue between the countries.
The Obama administration has attacked Vladimir Putin over his visit to Crimea today, calling the move "provocative and unnecessary".
The Russian President visited the peninsula, annexed from Ukraine in March, to mark the anniversary of the Soviet Union's victory over Nazi Germany.
US State Department spokeswoman Jen Psaki issued a strong condemnation of the visit, saying:
"This trip is provocative and unnecessary. Crimea belongs to Ukraine and we don't recognize, of course, the illegal and illegitimate steps by Russia in that regard,"
European Ambassadors have agreed in principle to add approximately 15 people and five Crimean-based companies to the Russia sanctions list, diplomats told Reuters.
President Vladimir Putin has hailed the Crimea region joining Russia as he visited the area for the first time since it was annexed from Ukraine in March.
Putin delivered a speech in the city of Sevastopol and watched a parade of Russian navy ships and a flyby of Russian aircraft which marked Victory Day - the World War Two defeat of Nazi Germany.
Ukraine has condemned Putin's visit as trampling on international law and deliberately escalating the crisis.
Russian President Vladimir Putin has attended a Victory Day parade in Sevastopol, Crimea, marking his first visit to the area since it was annexed in March.
His visit to the region is likely to outrage the West and has already been denounced by the Ukrainian government, with the foreign ministry calling it a "deliberate escalation" of the crisis.
Putin flew to Crimea after attending a military parade in Moscow, which was making the anniversary of the World War Two victory over Nazi Germany.
Russian President Vladimir Putin's visit to Crimea is a "deliberate escalation" of the crisis, Ukraine's Foreign Ministry said.
Russian President Vladimir Putin has landed in the Crimean city of Sevastopol, the Kremlin press office said.
His arrival comes on the day of Victory Day parades across the region, which celebrates the Soviet victory in World War Two.