EU foreign ministers said they also have stopped preparation for the G8 summit which is set for June in the Russian resort of Sochi.
EU foreign policy chief Catherine Ashton said the EU would give Russia until the Thursday show clear signs of goodwill, including a willingness to open talks and a withdrawal of Russian troops to their barracks in the Crimea.
"The ambition is to see the situation improve. If it doesn't, then the course is set," Ashton said after the foreign ministers' meeting.
She said she will meet Russian Foreign Minister Sergei Lavrov on Tuesday in Madrid.
The ambassadors of NATO's 28 member nations will hold a second emergency meeting on Ukraine Tuesday after Poland invoked an article calling for consultations when a nation sees its "territorial integrity, political independence or security threatened," the alliance said in a statement.
At the EU meeting, many foreign ministers stressed the immediate focus should be on diplomacy and promoting direct dialogue between Russia and the new leadership in Ukraine.
The EU is Russia's biggest trading partner, and Russia is the EU's third-largest partner, mostly thanks to exports of raw materials such as oil and gas.
Economic sanctions would hurt all sides, said Dutch Foreign Minister Frans Timmermans.
"Those consequences will be bad for everyone, but for Russia they will be far worse than for the EU. We can target other markets if we have to. (Russia) will have trouble to quickly find other customers," he said.