By Natalia Zinets and Conor Humphries
LVIV, Ukraine/DUBLIN (Reuters) - Russian forces bombarded cities in Ukraine as the United States imposed more sanctions on Wednesday after civilian killings widely condemned as war crimes and Ukraine's President urged a decisive Western response amid divisions in Europe.
Russia's 42-day-long invasion has forced more than 4 million people to flee abroad, killed or injured thousands, left a quarter of the population homeless, turned entire cities into rubble and prompted a slew of Western restrictions on Russian elites and the economy.
The new measures announced by Washington included sanctions on President Vladimir Putin's two adult daughters, days after the grim discovery of civilians shot dead at close range in Bucha, north of Kyiv, when it was retaken from Russian forces.
"We're going to keep raising the economic costs and ratchet up the pain for Putin, and further increase Russia's economic isolation," U.S. President Joe Biden said.
The United States wants Russia expelled from the Group of 20 major economies forum, and will boycott a number of meetings at the G20 in Indonesia if Russian officials show up, according to Treasury Secretary Janet Yellen.
But Ukrainian President Volodymyr Zelenskiy was critical of some in the West and said he could not tolerate "any indecisiveness."
"The only thing that we are lacking is the principled approach of some leaders - political leaders, business leaders - who still think that war and war crimes are not something as horrific as financial losses," he told Irish lawmakers.
European Union diplomats failed to approve on Wednesday new sanctions, as technical issues needed to be addressed, including on whether a ban on coal would affect existing contracts, sources said.
EU member Hungary said it was prepared to meet a Russian request to pay roubles for its gas, breaking ranks with the rest of the bloc and highlighting the continent's reliance on imports that have held it back from a tougher response on the Kremlin.
Western policymakers have denounced the killings in Bucha as war crimes, and Ukrainian officials say a mass grave by a church there contained between 150 and 300 bodies.
Moscow denied targeting civilians there or elsewhere. Russia's foreign ministry said that images of bodies in Bucha were staged to justify more sanctions against Moscow and derail peace talks with Kyiv.
Russia says it is engaged in a "special military operation" designed to demilitarise and "denazify" Ukraine. Ukraine and Western governments reject that as a false pretext for its invasion.
Reflecting such fears, the EU executive said it had begun a stockpiling operation to boost its defences against chemical, nuclear and biological threats.
BESIEGED CITY
Ukrainian authorities said late on Wednesday they cannot help people evacuate from the eastern front line town of Izyum or send humanitarian aid because it is completely under Russian control as the east sees the worst fighting.
A siege of the southern port of Mariupol has trapped tens of thousands of residents without food, water or power.
State-owned Ukrainian Railways said there were a number of casualties after three rockets hit a station in eastern Ukraine. It did not give a precise location.
Many in the eastern town of Derhachi, just north of Kharkiv and near the border with Russia, have decided to leave while they can.
Buildings have been badly damaged by Russian artillery. Kharkiv itself has been hammered by air and rocket strikes from the start.
Mykola, a father of two in Derhachi who declined to give his surname, said he could hear the thud of bombardments every night, and had been hunkering down with his family in the corridor of their home.
"(We'll go) wherever there are no explosions, where the children won't have to hear them," he said, hugging his young son and struggling to hold back the tears.
Ukraine's military said Russian forces were continuing preparations for an eastern offensive in order to take full control of the Donetsk and Luhansk regions. It said the main focus of current hostilities was Donetsk, where Russian troops were still trying to seize all of Mariupol.
Ten high-rise buildings were on fire in the eastern town of Sievierodonetsk after Russian shelling on Wednesday, the region's governor said in an online post.
NEW SANCTIONS
The new U.S. sanctions include a ban on Americans from investing in Russia.
The sanctions hit Russia's Sberbank, which holds one-third of Russia's total banking assets, and Alfabank, the country's fourth-largest financial institution, but energy transactions were exempted, U.S. officials said.
Britain also froze Sberbank's assets, and said it would ban imports of Russian coal by the end of the year.
But Europe is walking a tightrope as Russia supplies around 40% of the EU's natural gas consumption and the bloc also gets a third of its oil imports from Russia, about $700 million per day.
Germany, Europe's largest economy which relies on Russian gas for much of its energy needs, warned that while it supported ending Russian energy imports as soon as possible it could not do it overnight.
Despite the sanctions, the Russian rouble extended recovery gains on Wednesday, returning to levels seen before the invasion, shrugging off fears of a potential default on international debt as it paid dollar bondholders in roubles.