NATO's foreign ministers ordered an end to civilian and military co-operation with Russia on Tuesday and told their generals and admirals to quickly figure out ways to better protect alliance members that feel threatened by Vladimir Putin's Kremlin.

The 28-member alliance, the keystone of U.S. and European security since the end of World War II, was reacting to its most serious crisis in years: Russia's unilateral annexation of Ukraine's Crimean Peninsula, which the U.S. and its allies have condemned as an illegal land grab.

U.S. Secretary of State John Kerry and the other ministers, meeting at NATO headquarters in Brussels behind closed doors, unanimously agreed Tuesday on a number of measures.  A civilian NATO official who attended the meeting and briefed reporters afterwards on condition of anonymity said the steps included:

  • The suspension of "all practical civilian and military co-operation" between NATO and Russia. NATO officials said ambassadorial-level contacts will remain open to assure a reliable channel of communication.

  • The possible deployment and reinforcement of military assets in eastern NATO members, such as Poland and the Baltic states, that feel menaced by Moscow's latest actions. 

  • A possible increase of readiness levels for the NATO rapid response force.

  • A possible review of NATO's crisis response plans, as well as its military training and exercise schedules.

NATO Supreme Commander Gen. Phil Breedlove and his subordinates will draw up the proposals within a few weeks and then submit them to political leaders for their approval, the NATO official said.

Breeedlove is reportedly looking at options including moving a U.S. warship to the Black Sea and bolstering scheduled NATO exercises, an unnamed defence official told Reuters. 

A small team of about 10 soldiers from an army brigade could also head to Europe "very soon" to better prepare for a larger scheduled deployment this summer as part of a NATO response force.

"This brigade combat team was already scheduled to be part of the NATO response force going this summer. And we're just looking ... at ways that we can improve their deployment even more," the official said. 

To reassure alliance members closest to Russia and Ukraine, NATO already has stepped up air patrols over the Baltic Sea and AWACS surveillance flights over Poland and Romania. The U.S. deployed a warship to the Black Sea last month for exercises with allies. 

'One man' can't rewrite Europe's boundaries

Foreign Affairs Minister John Baird said after the meeting that the decision to end civilian and military co-operation with Russia is just one step in a long journey to end the Ukraine crisis. 

"This is exactly what Canada did weeks ago. It's not going to be business as usual so we're suspending all civilian and military co-operation with the Russian Federation," Baird told The Canadian Press from Brussels.

Asked whether NATO has been too slow to respond, Baird said: "It's the first minister's meeting we've had since the crisis came about."

Baird said NATO will consider options to counter Russia's unilateral annexation of Ukraine's Crimean peninsula. The minister said capacity building, tactical support and beefing up assets are among them.

"We've got a whole range of options that we're taking. Obviously, we want to stand in solidarity with our NATO allies, and beef up tactical support, co-operation and efforts," Baird said.

"There's no one action which is going to get the change we want. This is just one more step in a long journey to say that it's unacceptable that in 2014 one man in the Kremlin can try to rewrite the boundaries of Europe."

Baird wouldn't comment specifically on possible NATO troop options, except to say the alliance's military exercises — which Russia often finds provocative — would continue.

In recent days, Baird visited NATO-member Romania and Ukraine's neighbour Moldova as a deliberate show of solidarity prior to Tuesday's foreign ministers meeting. He said the current crisis has implications for other countries in the region.

Analysts have said Moldova's breakaway region of Transnistria, which borders Ukraine, may be next target of Russian President Vladimir Putin.

"We've got a number of crises. We've got the problem, the occupation, the illegal annexation of Crimea. We've got the troop build-up on Eastern Ukraine, concerns about Odessa, concerns about Moldova, concerns about Georgia and more broadly concerned about NATO proper," said Baird.

"We think a strong response is necessary."

Prior to the meeting, the chief of NATO downplayed reports of a Russian troop withdrawal from areas along its border with Ukraine. Russia's Defence Ministry on Monday said one battalion — about 500 troops — had pulled back.

"This is not what we have seen," NATO chief Anders Fogh Rasmussen told reporters Tuesday. "And this massive military buildup can in no way contribute to a de-escalation of the situation — a de-escalation that we all want to see — so I continue to urge Russia to pull back its troops, live up to its international obligation and engage in a constructive dialogue with Ukraine."

An estimated 35,000 to 40,000 Russian troops equipped with tanks, other armoured vehicles and fixed and rotary wing aircraft remained positioned near the border with Ukraine, a NATO military official told The Associated Press on Tuesday, speaking on condition of anonymity because of the sensitive nature of the information.

Russia hikes gas prices for cash-strapped Ukraine

Russia, meanwhile, sharply hiked the price for natural gas it sends to Ukraine and threatened to reclaim billions in previous discounts, raising the heat on Ukraine’s cash-strapped interim government.

Alexei Miller, the head of Russia's state-controlled natural gas giant Gazprom, said the company has withdrawn December's discount that put the price of gas around $296 per 1,000 cubic metres and set the price at about $425 per 1,000 cubic metres for the second quarter.

Miller said that the decision to charge a higher price in the second quarter was made because Ukraine has failed to pay off its debt for past supplies, which now stands at $1.7 billion.

Russian Prime Minister Dmitry Medvedev has said that Russia had given Ukraine $11 billion in gas discounts in advance and should claim the money back — a threat repeated Tuesday by Deputy Foreign Minister Grigory Karasin.

The Russian moves would fall hard on Ukrainian consumers, who have benefited from generous state subsidies that have kept gas prices low while swelling government debt.

Ukraine, which is teetering on the verge of bankruptcy, has agreed to gradually withdraw subsidies under a deal with the International Monetary Fund that required the country to make its utility costs economically viable for the state by 2018 as condition for up to $18 billion in loans.

The discount was part of a financial lifeline which Russian President Vladimir Putin offered to Ukraine's President, Viktor Yanukovych, after his decision to ditch a pact with the European Union in favor of closer ties with Moscow. The move fuelled three months of protests which led Yanukovych to flee to Russia in February.

Kyiv authorities struggle for control

Ukrainian police, meanwhile, moved to disarm members of a radical nationalist group after a shooting spree in the capital late Monday.

UKRAINE-CRISIS/

Members of Ukraine's far-right radical group Right Sector leave their headquarters in Dnipro Hotel as police special forces stand guard in Kyiv on Tuesday. Ukraine's interim government has struggled to deal with the group, which helped oust former President Viktor Yanukovych. (Max Levin/Reuters)

Authorities said a Right Sector member — the Right Sector is one of the most prominent radical nationalist groups that helped ouster Yanukovych — shot and wounded three people outside a restaurant adjacent to Kyiv's main Independence Square, including a deputy city mayor, triggering a standoff that lasted overnight.

Police responded by surrounding the downtown Dnipro Hotel, which Right Sector had commandeered as its headquarters, demanding that the radicals lay down their weapons and leave. Right Sector members agreed Tuesday to leave their weapons behind and went to a suburban camp, escorted by officers of Ukraine's Security Service.

The Right Sector has quickly fallen out with the new government. Last week, one of its leaders was shot dead while resisting police.

The Ukrainian parliament has voted to order police to disarm all illegal armed units. 

If police disarm nationalists and other radical groups, it would undermine Russia's key argument: the allegation that the new Ukrainian government was kowtowing to nationalist radicals, who threaten Russian-speakers in southeastern Ukraine.

With files from Reuters