Updated

Secretary of State John Kerry said Thursday Russia is not abiding by last week’s Geneva agreement to de-escalate the crisis in Ukraine and warned "if Russia continues in this direction, it will be not just a grave mistake, it will be an expensive mistake."

Without specifying any specific future sanctions, he laid the groundwork, saying unless Russia changes course, "the world will make sure costs for Russia will only grow."

One week after Geneva, he said, Russia “has refused to take a single step in the right direction.”

Kerry says he has seen U.S. and Ukrainian intelligence which shows the separatists working in Ukraine are taking direct orders from the Russians. He said Russian officials have not once gone on TV since the Geneva agreements to call for de-escalation, to call on the separatists operating in Ukraine to stand down.

He told reporters at the State Department, it was clear “only one country is keeping its word.”

“Let’s get real,” he said. “The Geneva Agreement is not open to interpretation.”

Kerry's remarks came after Russia announced new military exercises involving ground and air forces near its border with Ukraine, swiftly responding to a Ukrainian operation to drive pro-Russia insurgents out of occupied buildings in the country's tumultuous east.

The Ukrainian move, which killed at least two people, brought new threats from Russian President Vladimir Putin, who denounced it as a "punitive operation."

"If the Kiev government is using the army against its own people, this is clearly a grave crime," Putin said.

Putin's statement and the announcement of new military maneuvers sharpened anxiety over the prospect of a Russian incursion into Ukraine. Russia's foreign minister warned a day earlier that any attack on Russian citizens or interests in eastern Ukraine would bring a strong response.

The Associated Press contributed to this report.