Reports suggest 6,000 Russian troops have been sent into the Ukraine, despite a warnings from Barack Obama that "there will be costs" if the country militarily intervenes in the crisis.
The US president's blunt message came yesterday after armed men described as Russian troops took control of key airports in Crimea yesterday and Russian transport planes were said to have flown into the strategic region - an ominous sign of the Kremlin's iron hand in Ukraine.
Mr Obama did not say what the "costs" might be, but US officials said he may cancel plans to attend an international summit in Russia this year and could halt discussions on deepening trade ties with Moscow.
According to Sky News, Russian troops are continuing efforts to gain control of key sites in the south-eastern region of Crimea, including an anti-aircraft missile base.
David Cameron also renewed his call on Moscow to respect Ukraine's territorial integrity in a telephone call with Vladimir Putin yesterday.
No 10 said the premiers agreed that free and fair elections were the best way to secure Ukraine's future.
A Downing Street spokeswoman said: "The Prime Minister called President Putin to discuss the situation in Ukraine, particularly the escalating tensions in Crimea.
"The Prime Minister emphasised that all countries should respect the territorial integrity and sovereignty of Ukraine.
A Downing Street spokeswoman said: "The Prime Minister called President Putin to discuss the situation in Ukraine, particularly the escalating tensions in Crimea.
"The Prime Minister emphasised that all countries should respect the territorial integrity and sovereignty of Ukraine. President Putin agreed, stressing that Russian military exercises in the area had been planned before the current situation in Ukraine.
"The two leaders discussed how the international community could support Ukraine on the path to stability. They agreed that the free and fair elections that the interim government has pledged to hold are the best way to secure a positive future for Ukraine in which all Ukrainian people are represented. A future that would not involve forcing the Ukrainian people to make a choice between Europe and Russia.
"They agreed the international community should also consider how to help the interim government tackle the economic situation.
"They plan to keep in touch on the issue."
The Foreign Office has issued fresh travel guidance advising against all visits to the Crimean Peninsula and calling on those already there to leave.