Ominous signs are appearing in Ukraine and Moscow that could mean that a Russian invasion is imminent.

Putin has broken off communications with the White House, while Defense Secretary Chuck Hagel can't raise anyone in the Russian government. Russian troops on the border with Ukraine continue to "pulse" - drive toward the border and then stop. Russian fighter planes have violated Ukrainian air space. And the BBC is reporting that both sides in Eastern Ukraine think a Russian invasion "inevitable":

There is no sign of de-escalation in eastern Ukraine, according to the BBC's Natalia Antelava who has been in Donetsk and Slaviansk.

She told BBC World News that tension was very high, with armed men patrolling the streets, and that her team had been held at gunpoint.

Locals on both sides felt a sense of "inevitability" of a Russian invasion, she continued, and there was "a real fear" that there would be a clash.

She said she saw evidence on Friday that some armed men in Slaviansk were from Russia.

Meanwhile, pro-Russian separatists have apparently kidnapped some European military observers:

The group from the Organization for Security and Co-operation in Europe were detained Friday as it entered the town of Slavyansk, alongside five Ukrainian military representatives and the driver of their bus, Ukraine's Interior Ministry said.

Separatist leader Denis Pushilin, self-declared chairman of the so-called "Donetsk People's Republic," told CNN on Saturday that the men are not from the OSCE but that some are NATO spies.

The self-declared mayor of Slavyansk, Vyacheslav Ponomarev, said the men were unarmed soldiers from NATO countries who did not have permission to be there.

ALso, the G-7 announced agreement on new sanctions against Russia, ratcheting up the pressure on Putin and his inner circle.

Reuters:

The G7 communiqué did not give details of what form the new sanctions would take, but they appeared to mark a significant ratcheting up of the visa bans and asset freezes already imposed on individuals and entities associated with the Kremlin.

"We believe that these sanctions will have a significant impact," U.S. Deputy National Security Advisor for Strategic Communication Ben Rhodes said.

Putin this week for the first time acknowledged that the sanctions were causing difficulties for Russia, though he said the impact was not "critical."

The ratings agency Standard & Poor's cut Russia's sovereign long-term rating by one notch on Friday, effectively making it more expensive for Russia's government to borrow money. That forced the central bank to raise its key interest rate to limit a fall in the value of the rouble.

Russian banks have been moving funds out of foreign accounts in anticipation of sanctions.

However, upping the pressure on Moscow carries risks for the West too, and for Europe especially, because it depends on Russia for about a quarter of its gas needs.

Russia has threatened to cut off Ukraine, which would have a knock-on effect on customers further west because many of the pipelines go through Ukrainian territory.

Officials from the European Union, Ukraine, and Ukraine's EU neighbor Slovakia, met in Kiev on Saturday to discuss technical ways to reduce the impact of a cut-off.

U.S. officials said the new sanctions on Russia will likely target individuals or companies with influence in specific sectors of the Russian economy such as energy and banking.

Sources familiar with the matter said the U.S. list is expected to include "cronies" of Putin.

Whatever Putin's game, he's winning. Ukraine is dancing to his tune, and the west has been largely sidelined, Only Putin knows if war is "inevitable" but regardless of his preparations and feints, he has built up tensions in the region to near unbearable levels. He has the psychological edge over his adversaries, which makes his moves all the more threatening.

But Putin still has a lot more to lose than gain if he invades. Right now, he is like a cat toying with a mouse, deciding if he's grown bored with the game and will either let the mouse go or devour it.