The US is considering "serious sanctions" against Russia, over its conduct in relation to the conflict in Ukraine said Secretary of State John Kerry.

Speaking during a visit to London, Mr Kerry accused Russia of "craven behaviour" by supporting the rebels, which undermined a recent ceasefire.

"Russia has engaged in an absolutely brazen and cynical process over these last days," he said.

"We're not going to sit there and be part of this kind of extraordinarily craven behaviour at the expense of the sovereignty and integrity of a nation."

"In the next few days I anticipate that President Obama will evaluate the choices that are in front of him and will make his decision," he said.

"If this failure continues, make no mistake, there will be further consequences including consequences that will place added strains on Russia's already troubled economy."

Kremlin spokesperson Dmitry Peskov rejected the accusations.

"The obsession to make somebody 'pay a price' - as they like saying in Washington - absolutely does not contribute to settling the situation in the southeast of Ukraine," he told Russia's Ekho Moskvy radio.

Meanwhile, dozens of prisoners were exchanged between pro-separatist rebels and the Ukrainian military, the first step of the February 12 ceasefire agreement which has been successfully carried out.

France, Germany and Ukraine call for free access to ceasefire observers (16 Feb 2015)

Ceasefire comes into effect in Ukraine (15 Feb 2015)