Daniel Fried, coordinator for sanctions policy at the State Department, said at a think tank event that the sanctions have been successful in tempering Russia's support for the rebels and engaging Moscow in a Western-mediated peace process with Kiev.
Sanctions might well have acted as a deterrent and "prevented things from being much, much worse," Fried said, adding that anyone who thinks that the situation in Ukraine couldn't be much worse doesn't have a big enough imagination.
The United States and the European Union responded by banning business transactions with key Russian companies and imposed travel bans on top officials.
A cease-fire agreement signed in February 2015 in Minsk, Belarus, has significantly reduced the violence in Ukraine, but it is regularly violated by both sides.
The main stumbling block is the conduct of local elections on rebel-held territories, which Kiev says it cannot do while fighting continues.
Fried said sanctions always take time and patience to work and expressed hope that keeping the pressure on Russia will allow Ukraine to implement much needed reforms to integrate further with the West.
EU leaders will meet at the end of June to decide whether to prolong, modify or drop them. Fried expressed confidence that the sanctions will be kept, but Caroline Vicini, deputy head of the European Union's delegation to the US, was more cautious and said nothing can be promised.
