THE HAGUE (AFP) - The Group of Seven top economic powers said Monday they are ready to step up sanctions against Russia if Moscow fails to de-escalate the crisis in Ukraine that has shaken relations.

"We remain ready to intensify actions including coordinated sectoral sanctions that will have an increasingly significant impact on the Russian economy if Russia continues to escalate this situation," the G7 said in a statement after crisis talks in The Hague on Russia's absorption of Crimea.

"Diplomatic avenues to de-escalate the situation remain open, and we encourage the Russian government to take them," the statement said, calling on Moscow to begin talks with Ukraine and "avail itself of offers of international mediation."

The G7 leaders condemned Russia's behaviour as "not consistent" with the group's shared beliefs and shared responsibilities.

"We will suspend our participation in the G8 until Russia changes course and the environment comes back to where the G8 is able to have a meaningful discussion," the statement said.

"We stand firm in our support for the people of Ukraine who seek to restore unity, democracy, political stability, and economic prosperity to their country."