The leaders of the most powerful countries also tackled threats to global security posed by Islamist extremism and risks to the world economy from Greece.
World leaders on Monday warned Russia it would face stepped-up sanctions for its "aggression" in Ukraine, as they wrapped up a G7 meeting also pledging strong action to fight climate change.
At a luxury retreat nestled in the picture-perfect Bavarian Alps, the leaders of the most powerful countries also tackled threats to global security posed by Islamist extremism and risks to the world economy from Greece.
For the third time, Kremlin strongman Vladimir Putin was barred from a G7 summit due to what US President Barack Obama termed his "aggression in Ukraine", as the Group of Seven top powers closed ranks against Russia.
"We ... stand ready to take further restrictive measures in order to increase cost on Russia should its actions so require," said the leaders in a joint communique after the two-day huddle. "We recall that the duration of sanctions should be clearly linked to Russia's complete implementation of the Minsk agreements and respect for Ukraine's sovereignty," the leaders added, referring to a peace deal struck in the Belarus capital.
The tough line from the world's power brokers came as Ukraine's defence minister accused pro-Russian rebels -- backed by Moscow -- of deploying an army of 40,000 men on the Ukrainian border, equivalent to a "mid-sized European state." A recent flare-up in fighting in the east has left at least 28 dead and threatened the Minsk ceasefire deal.
Sanctions could also be "rolled back" if Russia lived up to its commitments, the communique said. "Ultimately this is going to be an issue for Mr Putin. He's got to make a decision," said Obama. "Does he continue to wreck his country's economy and continue Russia's isolation in pursuit of a wrong-headed desire to recreate the glories of the Soviet empire or does he recognise that Russia's greatness does not depend on violating" other countries' territory, he asked.
German Chancellor Angela Merkel, hosting the talks, noted Russia was involved in resolving several other global crises and called for their "cooperation." Nevertheless, in a pointed barb at Moscow, she stressed that "the G7 shares common values like freedom, democracy and human rights. Therefore one can say that the G7 is a community that assumes responsibility."
Iraq's Prime Minister Haider al-Abadi was invited to discuss the US-led campaign to help his country fight the Islamic State extremists who launched a lightning offencive a year ago and have snatched over a third of the country's territory.
Also Read: G7 summit: Obama, Hollande reach agreement on Ukraine crisis, Iran nuke deal
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