Putin claimed the "operation" was to "protect people who have been subjected to bullying and genocide... for the last eight years," or since 2014, when Russia annexed Ukraine's Crimea. Moscow-backed separatists have fought the government's forces in eastern Ukraine ever since.
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"These sanctions cover the financial sector, the energy and transport sectors, dual-use goods as well as export controls and export financing, visa policy, additional listings of Russian Individuals and new listing criteria," the European Union said in a statement.
"With this package, we will target the strategic sectors of the Russian economy by blocking their access to technologies and markets that are key to Russia," European Commission President U von der Leyen said before presenting the sanctions.
NATO allies have also warned that Russia was seeking a pretext to invade Ukraine further.
Still, diplomatic efforts were continuing to prevent an invasion. But when Putin announced the recognition of two separatist regions in eastern Ukraine as "independent republics," diplomacy came to a halt.
"While we were trying to find a political solution, they were planning for this invasion," NATO chief Jens Stoltenberg said on Thursday. "Russia has shut the door" on a political solution, he added.
Up until late Wednesday, Ukraine's Zelenskyy said he attempted to reach out to Putin. In an emotional address, Zelenskyy said, "Today I initiated a phone call with the president of the Russian Federation. The result was silence."
Russia on Wednesday had withdrawn its diplomatic mission from Kyiv. Ukraine on Thursday officially severed diplomatic ties with Russia.
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A brief history of Ukrainian-Russian relations
Ukraine, the largest country on the European continent, had a short-lived independent state following World War I. It was absorbed by the Soviet Union, which forced the terror of famine on the country in the 1930s under Josef Stalin.
In 1991, Ukraine officially declared its independence. Russia recognized Ukraine's borders in a number of international agreements.
With the collapse of the Soviet Union, Ukraine politically began looking westwards and started talking with both the European Union and NATO.
In 2004, the first of two significant revolutions on Maidan Square took place, known as the "Orange Revolution." That year, voters elected the pro-Western candidate Viktor Yushchenko over the Russian-backed Viktor Yanukovych, who later won the 2010 elections.
In 2013, Yanukovych stopped the signing of an association agreement with the EU he had said he supported earlier. Protests ensued and the second Maidan revolution, Ukraine's "Revolution for Dignity" as it has become known, culminated in his security forces firing on demonstrators gathered on Maidan. Yanukovych fled to Russia by helicopter the next day, taking with him briefcases of cash and documents.
A year later, Russia annexed Crimea. Bloody battles and heavy losses in the eastern part of the country have been ongoing since then.
In eastern Ukraine, Russian-backed separatists are fighting for what they have called "people's republics " in the Donetsk and Luhansk regions, and more than 13,000 people have been killed so far, according to the UN. An additional 1.4 million Ukrainians have been internally displaced by the conflict.