"We urge Russia to pursue a different path and to find a political solution to this crisis. If Russia does not, then she should be in no doubt that there will be further consequences," Cameron said in a statement.
A senior NATO official said today that at least 1,000 Russian troops were on the ground supporting pro-Kremlin separatists who have been there since April.
"President Putin has said that Russia is willing to find a peaceful solution to the conflict but this is not credible when Russia is supporting pro-Russian separatists in Ukraine with arms and troops," Cameron said.
Russia insists none of its soldiers are on Ukrainian soil.
Cameron's comments come ahead of a NATO summit from September 4 hosted by the British government in south Wales at which Ukraine is expected to be high on the agenda.
The UN Security Council is to hold an emergency meeting on the crisis at 1600 GMT.
"Russia will be asked to explain why it has its troops inside Ukraine. It is very clear that Russian regular troops are now in Ukraine," said British Ambassador Mark Lyall Grant, whose country holds the presidency of the Security Council.
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