DONETSK, Ukraine — The Ukrainian army is setting its sights on the largest rebel-held city in eastern Ukraine while Western officials today warned that a Russian military buildup on Ukraine’s border could herald a major incursion to protect the separatists.

President Vladimir Putin has resisted mounting pressure from Russian nationalists to send the army in to back the mutiny in eastern Ukraine.

Even though the U.S. and NATO would be unlikely to respond militarily, the West would be certain to impose major sanctions that would put the shaky Russian economy on its knees and could erode Putin’s power.

Russia already is showing signs of economic dismay from sanctions imposed earlier this year, but Putin today showed Moscow aims to fight back, calling on government agencies to develop a list of agricultural imports from sanctions-imposing countries that could be banned for up to a year.

“When you see the buildup of Russian troops and the sophistication of those troops, the training of those troops, the heavy military equipment that’s being put along that border, of course it’s a reality. It’s a threat, it’s a possibility — absolutely,” U.S. Defense Secretary Chuck Hagel said today.

U.S. and NATO officials say there are about 20,000 Russian troops massed just east of Ukraine.

Pro-Russian separatists in eastern Ukraine have been fighting the Kiev government since April. Ukraine and Western countries have accused Moscow of backing the mutiny with weapons and soldiers, a claim the Russian government has denied.

Polish Prime Minister Donald Tusk said he believed “the threat of a direct intervention (by Russia) is definitely greater than it was a few days ago, or two weeks ago.”