The warning came after the EU added eight more Russians to its sanctions.
The G7 nations of economic powers, comprising the US, Canada, France, Germany, Italy, Japan and Britain, also said that Russia had undermined "Ukraine's sovereignty, territorial integrity and independence", BBC reported.
Earlier, describing new US and EU sanctions as "destructive and short-sighted", Russia said they would lead to higher energy prices in Europe.
The G7 leaders said Russia could still "choose the path of de-escalation".
Russia has come under increased pressure to end its support for the rebels in Ukraine, who Western governments believe were behind the downing of MH17, killing all 298 people on board.