Lenin Square, Donetsk, saw another pro-separatist rally on Sunday
EU diplomats meet on Monday to agree the names of more Russians to be targeted in a broadening of sanctions over Moscow's actions in Ukraine.
The US and other G7 states are also planning further steps against Russia, accusing it of destabilising Ukraine.
On Sunday, pro-Russian separatists freed a foreign observer seized in east Ukraine. Seven others are still held.
The team was shown to the media, a move described as "revolting" by Germany - the native country of four of them.
The group was operating under the auspices of the Organization for Security and Co-operation in Europe (OSCE), which is continuing efforts to free the others.
In other developments:
- A number of people were injured in the north-eastern city of Kharkiv, as football fans marching in support of a united Ukraine clashed with pro-Russia supporters
- Separatists in Donetsk seized control of the regional TV and radio headquarters, demanding broadcasts by a Russian channel be switched back on
- US President Barack Obama said the Kremlin had "not lifted a finger" to implement last week's deal in Geneva aimed at easing the crisis
- Mikhail Khodorkovsky, Putin opponent and former Russian oil tycoon, visited Donetsk on Sunday but was refused entry to the rebel-held city hall.
In eastern Ukraine, gunmen continue to occupy official buildings in a dozen cities, defying the government in Kiev.
The West has blamed Moscow for orchestrating a secessionist revolt in eastern Ukraine after it annexed Crimea last month. Moscow denies the claim.
Biting the economy
The US and EU already have assets freezes and travel bans in place targeting a number of Russian individuals and firms accused of playing a part in the annexation of Crimea.
Ambassadors from the 28 EU member states will meet on Monday to begin the process of deciding further potential sanctions against Russia and Russian individuals.
UK Foreign Secretary William Hague said discussions were still going on but there was "likely to be an extension of existing sanctions, of the travel bans and asset freezes on individuals".
"The more names we add to that list the more they do bite in the Russian economy," he told Sky News.
"But we are also working on more far-reaching measures of economic, trade and financial sanctions."
The White House said it would add names on Monday of people close to President Vladimir Putin and firms they control to a list of Russians hit by sanctions over Ukraine, and also impose new restrictions on high tech exports, Reuters news agency reports.
Diplomats
Eight foreign observers were led into Sloviansk town hall, in eastern Ukraine, by masked gunmen and shown to the media on Sunday.
German monitor Col Axel Schneider, who spoke for the group, stressed they were not Nato officers - contrary to claims made by the separatists - nor armed fighters, but diplomats in uniforms.
Later, one of the group was freed for medical reasons.
Germany strongly criticised the group's appearance before the media.
"The public parading of the OSCE observers and Ukrainian security forces as prisoners is revolting and blatantly hurts the dignity of the victims," said a statement (in German) from Foreign Minister Frank-Walter Steinmeier.
He added that Russia had a duty to "influence" the separatists so that the other members of the mission could be freed as soon as possible
The German group leader chose his words carefully when they were brought before the press, reports Rob Broomby
Earlier, self-declared Sloviansk Mayor Vyacheslav Ponomaryov said there was the possibility of exchanging the monitors for militia members held by the Kiev government.
Russia, an OSCE member, has pledged to "take all possible steps" to secure the observers' release.
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"We are also working on more far-reaching measures of economic, trade and financial sanctions”
William HagueUK Foreign Secretary
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