US President Barack Obama says Russia has "the opportunity to take a different path" over Ukraine but until it does the West will continue to keep it economically isolated.
Mr Obama insisted that the world does not want to keep punishing Russia but a clear message had to be sent over its actions in Ukraine which he said were a violation of international law.
Prime Minister David Cameron says Western leaders have agreed to "keep up the pressure on Russia" in relation to its "destabilising" actions in Ukraine.
Speaking at the G20 summit after meeting European leaders and US President Barack Obama to discuss the crisis, Mr Cameron said sanctions against Russia are necessary despite the costs to avoid a "frozen conflict on the continent of Europe."
Russian President Vladimir Putin flew out of the G20 summit in Brisbane before the leaders' lunch, telling a press conference he needed to get home and get some sleep before work on Monday morning.
Mr Putin said Ukraine had not been mentioned during the official sessions of the G20, but had dominated bilateral discussions with other leaders.
The Russian leader described his talks on Ukraine with European leaders as "very frank, very substantive and, I think, helpful".
He added: "I think we were able to get to a point where we understand each other better. We have our motives and I think that our partners were able to express their concerns to me. I think this will help us."
The leaders of the United States, Japan and Australia have vowed to oppose Russian efforts to destabilise eastern Ukraine during a rare trilateral meeting held at the G20 summit in Brisbane.
President Barack Obama, Japanese Prime Minister Shinzo Abe and Australian Prime Minister Tony Abbott said they would oppose "Russia's purported annexation of Crimea and its actions to destabilise eastern Ukraine," and were committed to "bringing to justice those responsible for the downing of Flight MH17."
David Cameron is set to join other EU leaders in talks with US President Barack Obama to discuss a co-ordinated Western response to continued Russian destabilisation of Ukraine.
Tensions over Ukraine have dominated a two-day summit of the G20 group of leading economies in Australia.
The Kremlin has denied reports that the Russian president was aiming to to duck out of the Brisbane summit early and miss the official lunch that winds up the two-day gathering.
On Monday EU foreign ministers are due to meet in Brussels to discuss possible further sanctions.
Russian President Vladimir Putin was unceremoniously warned today to stop de-stabilising Ukraine or face tough new sanctions.
David Cameron, President Obama and a host of other world leaders lined-up to condemn what they called Russia's "aggressive military intervention".
ITV News' Diplomatic Correspondent John Ray reports:
Vladimir Putin has warned world leaders that sanctions against Russia could backfire and affect neighbouring economies.
Russia's president said cutting his country's access to markets would impact upon Western exports and suggested it may lead to Russian banks demanding multibillion pound loans were repaid by the Ukraine.
Putin's comments were aired today in an interview with German broadcasters ARD.
David Cameron warned Vladimir Putin he faces a "fork in the road" over his future relationship with western nations following his role in the Ukraine crisis.
In a different reading of the pair's private discussion to that offered by the Kremlin, Downing Street said a "robust exchange" had seen the Prime Minister tell Putin he must observe September's peace agreement or risk facing further sanctions.
European leaders are to discuss the situation in Ukraine with US President Barack Obama tomorrow, and EU finance ministers will meet on Monday to consider the case for extending sanctions.
Vladimir Putin plans to skip a session at the G20 summit and leave early tomorrow, a Russian official has said, after he received heavy criticism from fellow world leaders of his country's role in the Ukraine crisis.
Among the G20 premiers to criticise Putin was David Cameron, who called for Russia to stop "destabilising" Ukraine ahead of a private meeting between the pair.
Vladimir Putin and David Cameron discussed rebuilding relations between Russia and the West and taking steps to resolve the crisis in the Ukraine, the Kremlin said.
The pair held discussions in private at the G20 summit in Australia, where Putin has been warned that further sanctions could be imposed on Russia over the Ukraine crisis.
A Kremlin spokesman said the pair spoke about "the fundamental reasons" for the current spat between Russia and the West.
He added: "Both Putin and Cameron have expressed interest in rebuilding those relations, in taking efficient measures to resolve the Ukraine crisis which will help to abandon confrontation mood."