The leaders are heading into the second and final day of a Nato summit in Newport, Wales that has been labelled the most critical since the end of the Cold War for the Western military alliance as it addresses a multitude of crises from Ukraine to Iraq to Afghanistan.
They agreed on Thursday to set up new funds to help Ukraine's military effort and treat wounded soldiers in a five-month conflict that has seen more than 2,600 people killed.
EU and US officials said sanctions against Russia would be announced on Friday in response to a major escalation of Russian military support to the rebels in eastern Ukraine in recent days.
But they added implementation could be delayed pending the ceasefire talks in Minsk.
Ukrainian President Petro Poroshenko voiced "careful optimism" about the talks, which will be attended by Russia and pro-Moscow rebels.
Nato leaders are also expected to approve plans to position troops and military equipment in eastern Europe to reassure ex-Soviet bloc member states unnerved by Russia's recent actions in Ukraine.
"While talking about peace, Russia has not made one single step to make peace possible," Nato chief Anders Fogh Rasmussen said after Ukraine-focused talks at the leaders' summit on Thursday.
"Instead of de-escalating the crisis, Russia has only deepened it," he said, adding that previous Russian statements on peace had been "a smokescreen for continued Russian destabilisation of the situation".
More lethal than ever
Rasmussen left open the door to a seven-point peace plan put forward on Wednesday by Russian President Vladimir Putin, saying: "If we are witnessing genuine efforts for a political solution, I would welcome it".
Poroshenko said he was hopeful about the plan because the initiative had come from pro-Moscow rebel leaders in eastern Ukraine.
But he added that political talks would be a "tough challenge", warning that Ukraine's independence and territorial integrity were "not for negotiation".
Poroshenko said some Nato members would cooperate with Ukraine on "non-lethal and lethal military items", although he did not specify which countries were involved and whether it would include direct arms supplies.
Former US presidential contender and outspoken Kremlin critic John McCain, on a visit to Kiev, urged Western allies to provide Ukraine with weapons to fend off Russia, and warned that otherwise the country could end up being "landlocked".
His concerns were backed up by a statement from the Pentagon, which said Russian forces massed near Ukraine's eastern border are "more lethal" than before and heavily armed with artillery and air defence weaponry.
"The force that we see arrayed on the border is exceptionally capable, probably more capable, more lethal than anything that we've seen up until now," spokesman Colonel Steven Warren told reporters.
Poroshenko earlier briefed a group of Nato leaders, including British Prime Minister David Cameron, US President Barack Obama, French President Francois Hollande and German Chancellor Angela Merkel.
Hollande called for a "real ceasefire" that would lead to a broader political agreement, and said France would only deliver warships worth 1.2 billion euros to Russia in November if these conditions were in place.
There was little sign of change on the ground, with AFP reporters hearing explosions on the outskirts of the flashpoint city of Mariupol and renewed shelling and gunfire in the rebel stronghold of Donetsk.
Russian Foreign Minister Sergei Lavrov also lashed out, denying Russian involvement and accusing the United States of undermining peace efforts by supporting "a pro-war party" in Kiev.
He said Washington was "drunk on anti-Russian rhetoric" after repeated accusations from the West that Russia is training and supplying rebels and sending its soldiers into Ukraine.
Mass Iraq kidnapping
Ukraine tops the agenda at the two-day talks, but the 28 Nato leaders must also tackle the menace of Islamist extremists in Iraq and Syria, and a problematic withdrawal from Afghanistan.
Cameron and Obama said in an editorial in the Times that they would not be "cowed" following the beheading of two US journalists by Islamic State (IS) jihadists, and promised to "confront" the radicals.
There were reports of fresh brutality on that front.
Police and witnesses said IS kidnapped dozens of residents of a village in Kirkuk province after locals there burned one of its positions along with a jihadist flag.
Rasmussen said NATO would "seriously" examine any request from Iraq for help in its campaign against the Islamic State, while Cameron said Britain was actively considering arming the Kurds.
Nato meanwhile faces another quandary in Afghanistan, where the alliance is due to end its combat operation this year, but finds it has no government to hand over to as presidential elections have failed to produce a winner.
Rasmussen warned that time was running out for a solution, raising doubts about Nato's planned post-2014 training mission after it formally concludes its longest-ever war this year.
"Time is short," he said.