US President Barack Obama called his Russian counterpart Vladimir Putin on Tuesday to discuss escalating violence in eastern Ukraine, urging him to embrace a negotiated solution.

Expressing unease at Russia's ongoing support for separatists in Ukraine, Obama warned that the failure of upcoming peace talks would lead to more pain for Russia.

During the call Obama underscored the importance of President Putin seizing the opportunity presented by the ongoing discussions between Russia, France, Germany and Ukraine to reach a peaceful resolution, the White House said.

If Russia continues its aggressive actions in Ukraine, including by sending troops, weapons, and financing to support the separatists, the costs for Russia will rise.

Obama has dangled the prospect of further sanctions against Russia and US arms being sent to the Ukrainian government if talks fail.

A four-nation peace summit is planned for Wednesday in Minsk.

The United States has voiced skepticism about Putin's sincerity in negotiating.

A previous agreement, signed in the Belarusian capital Minsk in September, has been largely ignored by Russia.

The White House on Tuesday said that the previous Minsk agreement must be the basis for any new deal.

Key points of that deal include withdrawing all troops and weapons from eastern Ukraine, allowing effective international monitoring of the international border and freeing hostages, White House spokesman Josh Earnest said.

While we're supportive of continuing diplomatic conversations, what's most important is for both sides to come to the table ready to not just make commitments, but live up to them, said Earnest.

Obama also spoke to Ukrainian President Petro Poroshenko, offering condolences for the loss of Ukrainian life.

A devastating rocket strike on Kiev's military headquarters in the east killed at least 37 people on Tuesday.

The president underlined the commitment of the United States to work with our international partners to provide the financial support Ukraine needs as it continues to undertake essential reforms, the White House said.