KUALA LUMPUR - US President Barack Obama warned Sunday that ethnic and religious conflicts could move Myanmar in a “very bad direction.”

Obama praised the “courageous process” of political reform taking place in a country formerly led by a military junta, but warned that democratisation after years of repression brought its own perils.

“Myanmar won’t succeed if the Muslim population is oppressed,” Obama said at a “town hall” meeting during a visit to Muslim-majority Malaysia.

Obama was referring to Myanmar’s Muslim Rohingya minority in Rakhine state which has been subject to persecution at the hands of Buddhist nationalists. “The danger now that they are democratising is that there are different ethnic groups and different religions inside Myanmar,” Obama said.

“If people start organising politically around the religious identity or their ethnic identity... then you can actually start seeing conflicts... that could move Myanmar in a very bad direction.” “In particular, you have a Muslim minority inside Myanmar right now that the broader population has historically looked down upon and whose rights are not fully being protected.”

Buddhist-dominated Myanmar, also known as Burma, has been by plagued by religious unrest in recent years with at least 250 people killed in Buddhist-Muslim clashes since 2012. Thousands more people have been displaced.

US President Barack Obama warned Sunday the West will take further measures against Moscow’s “provocation” in Ukraine, where pro-Russian militants are holding a team of international observers as “prisoners of war”. Speaking in Asia, Obama called for global unity over the crisis as Europe and the US prepare fresh sanctions against Moscow expected to come into force as early as Monday. AFP reporters in the flashpoint city of Slavyansk in eastern Ukraine said tensions were running high at checkpoints. Militants were reinforcing defences around occupied buildings and ordering journalists away.

President Obama said Sunday that foreign policy crises elsewhere and domestic political strife would not distract America’s attention from a rising Asia.

“We’re going to be in a stronger position to deter Mr Putin when he sees that the world is unified and the United States and Europe are unified rather than this is just a US-Russian conflict,” Obama said. Pro-Russia militias this month occupied a string of towns and cities in eastern Ukraine, sparking a military response from the Ukrainian army, which is laying siege to Slavyansk.

With nerves jangling around the world, a Western diplomat has said a Russian invasion of Ukraine in coming days could not be ruled out, with some 40,000 troops poised on the border.

Ukrainian Prime Minister Arseniy Yatsenyuk cut short a trip to the Vatican on Saturday to rush home to deal with the crisis, with has plunged East-West relations to their lowest point since the Cold War.

He has accused Russian warplanes of multiple incursions into Ukrainian airspace in an attempt to provoke Kiev into starting “a third world war”.

Speaking in Malaysia, Obama said Russia had “not lifted a finger” to implement a deal struck in Geneva on April 17 aimed at easing the crisis.

“So long as Russia continues down a path of provocation rather than trying to resolve this issue peacefully and de-escalate it, there are going to be consequences and those consequences will continue to grow,” he said.

He urged Russia to call on the militants in eastern Ukraine to leave occupied buildings and “participate with international observers and monitors rather than stand by while they are being bullied and in some cases detained by these thugs”.

Russia’s envoy to the Organisation of Security and Cooperation in Europe has said that Moscow will take “all possible steps” to secure the release of the OSCE team.

The Vienna-based OSCE told AFP that eight of its observers had been detained in Slavyansk since Friday - four Germans, a Pole, a Dane, a Swede and a Czech.

The chief of the insurgents’ self-styled “Republic of Donetsk”, Denis Pushilin, has accused them of being “NATO spies” and offered to release them only as a prisoner swap.

Ponomaryov said they were being held in the Town Hall, insisting they were “not our hostages - they are our guests” and stressing they were “doing well”.

He also confirmed that a team of negotiators from the OSCE - the Organisation for Security and Cooperation in Europe - would be arriving in Slavyansk later Sunday to discuss the situation.

Ukraine’s own security services said they being were held as “human shields” in “inhuman conditions” and that one of the group required urgent medical attention that was being denied.

Ponomaryov added that the rebels were also holding three Ukrainian military officers captured overnight on what he said was a spying mission.

As the crisis worsens, the Group of Seven leading economies and the European Union are readying sanctions that could be announced as soon as Monday in a bid to raise the pressure on Russian President Vladimir Putin.

In a statement on Saturday, the G7 - comprising the United States, Britain, Canada, France, Germany Italy and Japan - said it would “move swiftly to impose additional sanctions on Russia”.

The EU said top officials would meet on Monday to weigh further sanctions. A diplomat in Brussels said a list adding 15 people to the 55 Russians and Ukrainians already blacklisted by the EU had been approved in principle.

The US and EU have already targeted Putin’s inner circle with visa and asset freezes and imposed sanctions on a key Russian bank.

Obama stressed the need for a unified response.

“It’s important that we are part of an international coalition sending that message and that Russia is isolated in its actions,” he told reporters in Kuala Lumpur.

It was vital to avoid “falling into the trap of interpreting this as the US is trying to pull Ukraine out of Russia’s orbit, circa 1950. Because that’s not what this is about,” he said.

The confrontation escalated after Russia refused to accept the legitimacy of Kiev’s new pro-EU government, which came to power in February after four months of street protests forced the ouster of the Kremlin-backed president, Viktor Yanukovych.

While Obama has ruled out sending US or NATO forces into Ukraine, Washington has begun deploying 600 US troops to bolster NATO’s defences in nearby eastern European states.

The president, who has seen his current regional tour interrupted by the deepening East-West showdown over Ukraine, said the Asia-Pacific’s growing importance was such that Washington could not afford to ignore it.

“America has responsibilities all around the world and we are glad to embrace those responsibilities,” Obama said.

“And sometimes, we have a political system of our own and it can be easy to lose sight of the long view.

“But we have been moving forward on our rebalance to this part of the world,” Obama said at a town hall meeting with young leaders from Southeast Asia in Malaysia.

Obama said his administration was deepening commercial, defence and other partnerships with Asian nations, and especially those in Southeast Asia.

Before he left for the region, some foreign policy experts in Washington and elsewhere suggested Obama needed to do more to explain his strategy of redeploying US resources to Asia.

Doubts about US commitment and endurance have been exacerbated by national security crises in Europe and the Middle East.

Questions were also asked when Obama was forced to cancel a previous Asia trip late last year owing to a government shutdown brought about by a budget imbroglio between Democrats and Republicans.

Malaysia is the third stop on an Asian tour by Obama that has taken him to Japan and South Korea. He heads to the Philippines on Monday.