The EU has adopted new economic sanctions against Russia over the conflict in Ukraine, targeting the oil sector, defence equipment and sensitive technologies, EU sources say.

Russian state banks' access to capital is also likely to be restricted.

The aim is to increase the cost to Russia of its continued support for pro-Moscow rebels in eastern Ukraine.

Moscow denies charges by the EU and US that it is supplying heavy weapons to the rebels.

US Secretary of State John Kerry said Washington was also preparing further sanctions against Russia.

Details of the EU move are still coming in. The full sanctions statement is expected tomorrow, when the EU is also set to name more Russian officials facing asset freezes and travel bans in Europe.

Calls for the EU to act have been fuelled by the downing of flight MH17 over eastern Ukraine. All 298 people on the Malaysia Airlines jet were killed, many of them Dutch citizens.

An international team has again failed to access the crash site, amid heavy fighting between government forces and rebels there.

Western governments believe the rebels shot the plane down on 17 July with a Russian missile.

Ukraine's military has been on the offensive, seeking to encircle the pro-Russian separatist rebels in Donetsk region.

On Monday Russian President Vladimir Putin urged his country's defence industry chiefs to rely less on foreign military components and source more equipment in Russia.