EU leaders say they'll ask officials to urgently prepare possible new sanctions against Russia over the Ukraine crisis.

They've been meeting in Brussels as hundreds of Russian troops and vehicles remain stationed in eastern Ukraine.

Petro Poroshenko has said tanks had been used to "destroy virtually every house" in the town of Novosvitlivka, near the Ukrainian border city of Luhansk.

He added that there were now thousands of foreign troops and hundreds of foreign tanks inside Ukraine.

Mr Poroshenko was speaking at a press conference in Brussels ahead of an EU summit attended by European leaders, including Taoiseach Enda Kenny.

European Commission President Jose Manuel Barroso says they're trying to work with Russia:

Sanctions are likely to include measures against specific Russian firms in banking and energy sectors.

Meanwhile, NATO has released images apparently showing Russian forces on the ground in eastern Ukraine.

Government sources said separatists are believed to have heavy weaponry supplied by President Vladimir Putin.

Included in the weaponry are 100 tanks and artillery pieces, anti-tank weapons and shoulder-mounted missile launchers, the sources said.

Russia has repeatedly dismissed accusations it has sent soldiers or equipment across the border.

Barack Obama said the satellite pictures made it "plain" that Russia had "deliberately and repeatedly violated the sovereignty and territorial integrity of Ukraine".

He said: "The violence is encouraged by Russia. The separatists are trained by Russia, they are armed by Russia, they are funded by Russia."

NATO Secretary-General Anders Fogh Rasmussen said: "Despite Moscow's hollow denials, it is now clear that Russian troops and equipment have illegally crossed the border into eastern and south-eastern Ukraine.

"Russian forces are engaged in direct military operations inside Ukraine."

Ukrainian Prime Minister Arseny Yatseniuk has said he will ask parliament to drop the country's non-aligned status and apply to join Nato.

This has previously been dismissed as unacceptable by Russia.