Mayor of Ukrainian city shot; West prepares more sanctions

"The surgery was successful. His life-threatening condition is expected to go on for several days," a statement said. "He was unconscious when brought to the hospital."

The online statement also said a bullet casing was found at the scene.

Police said an investigation unit was trying to determine the circumstances of the shooting.

In a major challenge to Kiev's new leaders, armed rebels have captured towns and government buildings across eastern Ukraine and are holding a team of European monitors hostage.

Western nations accuse Moscow of supporting the separatist gunmen who are occupying official buildings in cities across the region.

The United States on Monday imposed sanctions against seven Russian government officials and 17 companies linked to Russian President Vladimir Putin in its latest action to punish Moscow for its actions in Ukraine.

The White House said the seven Russians, including two from Putin's inner circle, are now subject to a freeze on any assets they hold in the United States and a ban on U.S. travel.

In addition, the United States will deny export license applications for any high-technology items that could contribute to Russian military capabilities. The Commerce and State departments will revoke any existing export licenses that meet these conditions, the White House said in a statement.

"The sanctions build on the ones that were already in place. We're moving forward with an expanded list of individuals," U.S. President Barack Obama earlier told reporters in Manila, Philippines.

The move, Obama said, was to spur Putin to "walk the walk, not just talk the talk" in resolving the crisis in Ukraine.

If the latest round of sanctions does not work, the next phase could target economic sectors like banking, Obama said.

The European Union also announced Monday that it was imposing sanctions on 15 people who are "responsible for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine." A list of the people targeted by the latest sanctions will be published Tuesday and will go into effect at the same time, the Council of the European Union said. The sanctions will include asset freezes and travel bans.

U.S. Defense Secretary Chuck Hagel spoke on the phone with Russian Defense Minister Sergei Shoigu on Monday.

According to a Pentagon description of their conversation, Shoigu "reiterated his assurance that Russian forces would not invade Ukraine." Hagel, the Pengaton said, called for an end to what he described as "Russia's destabilizing influence inside Ukraine" and "warned that continued aggression would further isolate Russia and result in more diplomatic and economic pressure."

The Russian government's description of the call said Shoigu "definitively denied the groundless allegations of the presence of Russian sabotage and military intelligence groups on Ukrainian territory" and criticized what he called "anti-Russian hysteria recently unleashed in the Western press."

He also criticized what he said was an "unprecedented" increase in activity of U.S. and NATO troops in Eastern Europe near the Russian border, according to the Russian government's description of the call.

A homemade bomb exploded near Ukrainian soldiers who were in the eastern Donetsk region Monday, killing one and injuring another, Ukraine's Defense Ministry said.

The death came days after Ukrainian forces said they killed five pro-Russian militants in an operation to clear roadblocks near the city of Slavyansk last week. Police are investigating Monday's blast, the Defense Ministry said.

A CNN team covering a pro-Ukraine rally in Donetsk watched violence unfold Monday as pro-Russian separatists wielding batons beat demonstrators who said they wanted to see a united Ukraine.

Pro-Russian separatists holding a European military observer team in eastern Ukraine released one of the observers for medical reasons Sunday, shortly after parading them before cameras.

At least seven of the inspectors from the Organization for Security and Co-operation in Europe appeared at a news conference staged by Vyacheslav Ponomarev, the self-declared mayor of Slavyansk, who referred to them as "prisoners of war."

The freed observer was from Sweden and had been suffering from diabetes, Ponomarev spokeswoman Stella Khorosheva told CNN. Michael Bociurkiw, an OSCE spokesman in Kiev, called it "a welcome development."

The monitors were seized Friday outside Slavyansk, one of the flashpoints in the standoff between Ukraine's interim government and pro-Russian factions challenging its authority in the east. They said that although they have diplomatic status, they went along with Sunday's news conference because the mayor asked them to.

Germany strongly criticized the group's appearance before the media.

The "parading of OSCE observers and Ukrainian security forces as prisoners is abhorrent and a flagrant violation of their human dignity," Foreign Minister Frank-Walter Steinmeier said in a statement.

He added that Russia had a duty to "influence" the separatists so that the other members of the mission could be freed as soon as possible.

Putin has repeatedly criticized what he says is Kiev's use of force against Ukrainian civilians.