European leaders will discuss the escalating conflict between Russia and Ukraine when they meet President Barack Obama at a summit of world leaders in Australia this weekend ahead of an EU decision on further sanctions against Moscow.

European Union President Herman von Rompuy said Saturday that while the Ukraine conflict was not on the agenda of the G-20 summit of leaders of wealthy and developing economies, it would be discussed between Obama and EU leaders in Brisbane.

"We will continue to use all diplomatic tools including sanctions at our disposal," von Rompuy told reporters. "The EU foreign ministers will on Monday assess the situation on the ground and discuss possible further steps."

"We need to avoid a return to a full-scale conflict," he said.

In a speech to a Brisbane university audience on Saturday, Obama said that the United States was a leading voice in opposing Russian aggression in Ukraine, which he described as "a threat to the world."

He referred to the shooting down on July 17 of a Malaysia Airlines jet by a missile suspected to have been fired by Russian-backed rebels in eastern Ukraine with the loss of 298 lives, including 38 Australian citizens and residents.

"As your ally and friend, America shares the grief of these Australian families and we share the determination of your nation for justice and accountability," Obama said.

Von Rompuy called for both sides of the conflict to abide by the cease-fire agreement between Ukraine and the rebels that was signed in Minsk, Belarus, in September.

Russia must use its influence on the rebels to ensure they comply with the Minsk agreement, stop the flow of weapons and troops from Russia and withdraw Russian troops already in Ukraine, von Rompuy said.

U.S. Secretary of State John Kerry issued a similar call. The State Department said Kerry expressed "grave concern" about increased Russian support for the separatists and called for the implementation of the Minsk agreement, including a cease-fire, border monitoring, release of all hostages and a return to dialogue during a discussion with Russian Foreign Minister Sergey Lavrov.

Russian President Vladimir Putin arrived in Brisbane on Friday night ahead of the two-day summit, which began Saturday.

Von Rompuy declined to comment on the likelihood of the EU deciding to ratchet up sanctions.

"Russia has still the opportunity to fulfill its Minsk agreements and chose the path of de-escalation, which could allow sanctions to be rolled back," he said. "If it does not do so however, we are ready to consider additional action."