Dozens die in Odessa blaze as Ukraine violence spreads

Obama threatens to expand punitive sanctions to broad sections if Moscow continued to foment chaos

More than 30 people were killed in a "criminal" blaze in Ukraine's southern city of Odessa, as violence spread across the country during the bloodiest day since Kiev's Western-backed government took power.

Ukraine's interior ministry said at least 31 people had died in the fire yesterday, with local media reporting that pro-Russian militants were believed to have been in the burning building at the time.

Most of those who were killed died from smoke inhalation, while others perished trying to escape by jumping out of windows. Russia said it was "outraged" as the scenic port city became a new front in an escalating months-long crisis that has sparked fears of a Russian invasion.

The foreign ministry in Moscow called on Ukraine and its "Western backers to end the anarchy and take responsibility before the Ukrainian people", blaming Kiev's "criminal irresponsibility" for the sinister turn of events.

It capped a day of violent clashes between pro-Russian and pro-Ukrainian militants, with reports of renewed fighting in Slavyansk leading to the deaths of two more Ukrainian soldiers, meaning at least nine people had been killed in violence in the flashpoint eastern town throughout the day.

Already the most serious rupture in West-Moscow relations since the Cold War, the diplomatic war of words intensified as the United States threatened to hit Russia with new sanctions within three weeks over what Washington called its continued "destabilisation" of Ukraine.

President Barack Obama threatened to expand punitive sanctions to broad sections of the Russian economy if Moscow continued to foment chaos in the former Soviet republic ahead of planned May 25 presidential elections.

"If in fact we see the disruptions and the destabilisation continuing so severely that it impedes elections on May 25, we will not have a choice but to move forward with additional... severe sanctions," Obama said at a joint news conference with German Chancellor Angela Merkel.

"If Russia continues on its current course, we have a range of tools at our disposal, including sanctions that would target certain sectors of the Russian economy.