PARIS -- The United States and Russia agreed Sunday that the crisis in Ukraine requires a diplomatic resolution, but four hours of talks between U.S. Secretary of State John Kerry and Russian Foreign Minister Sergey Lavrov failed to break a tense East-West deadlock over how to proceed.
Sitting face-to-face but not seeing eye-to-eye on any of the most critical issues, Mr. Kerry and Mr. Lavrov advanced far-different proposals on how to calm tensions and de-escalate the situation, particularly as Russia continues to mass troops along its border with the former Soviet republic. As he called for Moscow to begin an immediate pullback of the troops, Mr. Kerry also ruled out discussion of Russia's demand for Ukraine to become a loose federation until and unless Ukrainians are at the table.
"The Russian troop buildup is creating a climate of fear and intimidation in Ukraine," Mr. Kerry told reporters at the home of the U.S. ambassador to France after the meeting, which was held at the Russian ambassador's residence and included a working dinner. "It certainly does not create the climate that we need for dialogue."
The U.S. believes the massing of tens of thousands of Russian soldiers, ostensibly for military exercises, along the border is at once an attempt to intimidate Ukraine's new leaders after Russia's annexation of the strategic Crimean peninsula and to use a bargaining chip with the United States and the European Union, which have condemned Crimea's absorption into Russia and imposed sanctions on senior Russian officials.
Mr. Kerry noted that even if the troops remain on Russian soil and do not enter Ukraine, they create a negative atmosphere.
"The question is not one of right or legality," he said. "The question is one of strategic appropriateness and whether it's smart at this moment of time to have troops massed on the border."
U.S. officials said Mr. Kerry proposed a number of ideas on troop withdrawals from the border and that Mr. Lavrov, while making no promises, told him he would present the proposals to the Kremlin.
At a separate news conference at the Russian ambassador's house, Mr. Lavrov did not address the troop issue. Instead, he made the case for Moscow's idea of Ukraine as a federalized nation with its various regions enjoying major autonomy from the government in Kiev. Russia says it is particularly concerned about the treatment of ethnic Russians and Russian speakers who live in southern and eastern Ukraine.
Mr. Lavrov said that Ukraine can't function as a "unified state" and should be a loose federation of regions that are each allowed to choose their own economic, financial, social, linguistic and religious models.
Ukrainian officials are wary of decentralizing power, fearing that pro-Russia regions would hamper its Western aspirations and potentially split the country apart. However, they are exploring political overhauls that could grant more authority to local governments.
The U.S. has been coy about their position on a federation. Washington has encouraged ongoing political and constitutional overhaul efforts that the government in Kiev is now working on, but U.S. officials insist that any changes to Ukraine's governing structure must be acceptable to the Ukrainians.
Mr. Lavrov said he and Mr. Kerry did agree to work with the Ukrainian government to improve rights for Russian-speaking Ukrainians and disarm "irregular forces and provocateurs."
Sunday's meeting was hastily arranged 48 hours after U.S. President Barack Obama and Russian President Vladimir Putin spoke by phone in a conversation in which Mr. Obama urged Mr. Putin to withdraw his troops from the border with Ukraine.
That call did little to reassure U.S. officials that Russia is not planning to invade Ukraine after its annexation of Crimea that the West has condemned as illegal and a violation of Ukraine's sovereignty and territorial integrity. The United States and Europe have imposed sanctions on senior Russian officials in response, sparking reciprocal moves from Moscow.
Sen. John McCain, R-Ariz., said the buildup indicates Russia may strike soon.
"If you'd asked me three or four days ago, I'd have said I believe not -- now I'm not sure," he said. "You don't keep troops massed on the border of a country for no reason."
Mr. McCain also said that the U.S. should consider forcing major American companies such as General Electric and Exxon Mobil to suspend business in or pull out of Russia if Mr. Putin attempts to take more territory from Ukraine or other neighboring nations, said Sen. John McCain of Arizona.
"I know that that's a tough call and I know that we don't want to hurt our own economy, but what are the consequences of Vladimir Putin just being able to act?" Mr. McCain, who advocates military assistance for the Ukraine, said in an interview for Bloomberg Television's "Political Capital with Al Hunt" airing last weekend.
Such a move likely would come through formal sanctions rather than political pressure on individual corporations, Mr. McCain said, and "would only be considered" if Mr. Putin "went much further."
Bloomberg News contributed.