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A pro-Russian fighter stands guard at a checkpoint in Slavyansk, eastern Ukraine, on June 12, 2014.

EVGENIY MALOLETKA/The Associated Press

The steadily advancing Ukrainian army is setting its sights on the largest rebel-held city in eastern Ukraine, while Western officials on Wednesday warned that a Russian military buildup on Ukraine's border could herald a major incursion to protect the separatists.

President Vladimir Putin has resisted mounting pressure from Russian nationalists to send the army in to back the mutiny in eastern Ukraine. Even though the U.S. and NATO would be unlikely to respond militarily, the West would be certain to impose major sanctions that would put the shaky Russian economy on its knees– and could quickly erode Mr. Putin's power.

Russia already is showing signs of economic dismay from sanctions imposed earlier this year, but Mr. Putin on Wednesday showed Moscow aims to fight back, calling on government agencies to develop a list of agricultural imports from sanctions-imposing countries that could be banned for up to a year.

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"When you see the buildup of Russian troops and the sophistication of those troops, the training of those troops, the heavy military equipment that's being put along that border, of course it's a reality. It's a threat, it's a possibility – absolutely," U.S. Defence Secretary Chuck Hagel said Wednesday. U.S. and NATO officials say there are now about 20,000 Russian troops massed just east of Ukraine.

Pro-Russian separatists in eastern Ukraine have been fighting the Kiev government since April. Ukraine and Western countries have accused Moscow of backing the mutiny with weapons and soldiers, a claim the Russian government has repeatedly denied.

The West has also accused Russia of most likely providing the insurgents with surface-to-air missiles that may have been used to shoot down a Malaysia Airlines passenger jet over rebel-held territory on July 17, killing all 298 people on board. Dutch Prime Minister Mark Rutte, whose nationals made up more than half of the victims, said Wednesday the search for victims' remains is being halted because of fighting in the area of the crash site makes it too dangerous to continue.

The international team of recovery workers, who only were able to reach the site on July 31 because of fighting, in has found remains of only a few victims, despite expectations it might find as many as 80. Mr. Rutte said that it now appears "fortunately that more was done after the disaster than we thought until now."

A U.S. official told the Associated Press that U.S. intelligence shows Russian forces continue to shell Ukrainian positions from inside Russian territory and send heavy weaponry – including artillery, armoured vehicles and air defence equipment – from a separatist training facility in southwest Russia. The official was speaking on condition of anonymity because he wasn't authorized to discuss intelligence matters publicly.

Adding to the concern is Russia's proposal in recent days for a humanitarian mission to eastern Ukraine. "We share the concern that Russia could use the pretext of a humanitarian or peacekeeping mission to send troops into eastern Ukraine," NATO spokeswoman Oana Lungescu saidd in an e-mailed statement.

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