Originally set to start at 1600 GMT, the summit was put back to 1800 GMT as early efforts to work out a deal faltered. "We need more consultations," one diplomat said.
German Chancellor Angela Merkel played down expectations any decisions would be made at all.
"It is very possible that there will only be an initial discussion. I don't think we will get there today but we will see," said Merkel, a key voice, as she arrived for the talks.
Washington is pressing its EU allies to toughen sanctions against Moscow but the European Union is divided.
Some members such as Italy and Germany are fearful significant economic ties with Russia could suffer if relations break down completely.
New measures could include freezing programmes in Russia run by the EU's European Investment Bank and the London-based European Bank of Reconstruction and Development, the statement said.
British Premier David Cameron arrived saying the situation in the Ukraine "is unacceptable ... We need to send a very clear message with clear actions" to Moscow.
The summit is also expected to discuss options for the European Council, which represents the bloc's 28 political leaders and sets overall policy direction.
It may also recommend naming a permanent head of the Eurogroup of finance ministers which coordinates policy on the single currency.
